Correlation Between SHIP HEALTHCARE and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and USWE SPORTS 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 SHIP HEALTHCARE and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and USWE SPORTS AB, you can compare the effects of market volatilities on SHIP HEALTHCARE and USWE SPORTS 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 SHIP HEALTHCARE with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and USWE SPORTS.
Diversification Opportunities for SHIP HEALTHCARE and USWE SPORTS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SHIP and USWE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and USWE SPORTS go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and USWE SPORTS
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the USWE SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, SHIP HEALTHCARE HLDGINC is 1.52 times less risky than USWE SPORTS. The stock trades about -0.06 of its potential returns per unit of risk. The USWE SPORTS AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 69.00 in USWE SPORTS AB on September 1, 2024 and sell it today you would earn a total of 7.00 from holding USWE SPORTS AB or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. USWE SPORTS AB
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| USWE SPORTS AB |
SHIP HEALTHCARE and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and USWE SPORTS
The main advantage of trading using opposite SHIP HEALTHCARE and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| SHIP HEALTHCARE vs. EVS Broadcast Equipment | SHIP HEALTHCARE vs. PARKEN Sport Entertainment | SHIP HEALTHCARE vs. PT Global Mediacom | SHIP HEALTHCARE vs. NTG Nordic Transport |
| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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