Correlation Between KOOL2PLAY and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY 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 KOOL2PLAY and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and USWE SPORTS AB, you can compare the effects of market volatilities on KOOL2PLAY 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 KOOL2PLAY with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and USWE SPORTS.
Diversification Opportunities for KOOL2PLAY and USWE SPORTS
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between KOOL2PLAY and USWE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY 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 KOOL2PLAY i.e., KOOL2PLAY and USWE SPORTS go up and down completely randomly.
Pair Corralation between KOOL2PLAY and USWE SPORTS
Assuming the 90 days horizon KOOL2PLAY SA ZY is expected to generate 3.14 times more return on investment than USWE SPORTS. However, KOOL2PLAY is 3.14 times more volatile than USWE SPORTS AB. It trades about 0.33 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.07 per unit of risk. If you would invest 15.00 in KOOL2PLAY SA ZY on November 27, 2024 and sell it today you would earn a total of 10.00 from holding KOOL2PLAY SA ZY or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. USWE SPORTS AB
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| USWE SPORTS AB |
KOOL2PLAY and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and USWE SPORTS
The main advantage of trading using opposite KOOL2PLAY and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY 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.| KOOL2PLAY vs. PLAYSTUDIOS A DL 0001 | KOOL2PLAY vs. ScanSource | KOOL2PLAY vs. THAI BEVERAGE | KOOL2PLAY vs. ANTA Sports Products |
| USWE SPORTS vs. SmarTone Telecommunications Holdings | USWE SPORTS vs. 24SEVENOFFICE GROUP AB | USWE SPORTS vs. Hisense Home Appliances | USWE SPORTS vs. Ultra Clean 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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