Correlation Between Tyson Foods and Under Armour

Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Under Armour at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tyson Foods and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tyson Foods and Under Armour, you can compare the effects of market volatilities on Tyson Foods and Under Armour and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tyson Foods with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Under Armour.

Diversification Opportunities for Tyson Foods and Under Armour

-0.75

Correlation Coefficient

Tyson Foods  Under Armour

Pay attention - limited upside

The 3 months correlation between Tyson and Under is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Under Armour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour and Tyson Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tyson Foods are associated (or correlated) with Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour has no effect on the direction of Tyson Foods i.e., Tyson Foods and Under Armour go up and down completely randomly.

Pair Corralation between Tyson Foods and Under Armour

Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the Under Armour. In addition to that, Tyson Foods is 1.11 times more volatile than Under Armour. It trades about -0.16 of its total potential returns per unit of risk. Under Armour is currently generating about 0.14 per unit of volatility. If you would invest  3,108  in Under Armour on April 24, 2025 and sell it today you would earn a total of  400.00  from holding Under Armour or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tyson Foods  vs.  Under Armour

Tyson Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tyson Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Under Armour

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Under Armour sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tyson Foods and Under Armour

The main advantage of trading using opposite Tyson Foods and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Under Armour can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Under Armour will offset losses from the drop in Under Armour's long position.

The idea behind Tyson Foods and Under Armour pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.