Correlation Between USWE SPORTS and KYUSHU EL
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and KYUSHU EL 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 USWE SPORTS and KYUSHU EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and KYUSHU EL PWR, you can compare the effects of market volatilities on USWE SPORTS and KYUSHU EL 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 USWE SPORTS with a short position of KYUSHU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and KYUSHU EL.
Diversification Opportunities for USWE SPORTS and KYUSHU EL
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USWE and KYUSHU is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and KYUSHU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYUSHU EL PWR and USWE SPORTS 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 USWE SPORTS AB are associated (or correlated) with KYUSHU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYUSHU EL PWR has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and KYUSHU EL go up and down completely randomly.
Pair Corralation between USWE SPORTS and KYUSHU EL
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.19 times more return on investment than KYUSHU EL. However, USWE SPORTS is 1.19 times more volatile than KYUSHU EL PWR. It trades about 0.17 of its potential returns per unit of risk. KYUSHU EL PWR is currently generating about -0.03 per unit of risk. If you would invest 74.00 in USWE SPORTS AB on October 20, 2024 and sell it today you would earn a total of 5.00 from holding USWE SPORTS AB or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. KYUSHU EL PWR
Performance |
| Timeline |
| USWE SPORTS AB |
| KYUSHU EL PWR |
USWE SPORTS and KYUSHU EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and KYUSHU EL
The main advantage of trading using opposite USWE SPORTS and KYUSHU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, KYUSHU EL 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 KYUSHU EL will offset losses from the drop in KYUSHU EL's long position.| USWE SPORTS vs. Yuexiu Transport Infrastructure | USWE SPORTS vs. Osisko Metals | USWE SPORTS vs. FIREWEED METALS P | USWE SPORTS vs. IMAGIN MEDICAL INC |
| KYUSHU EL vs. IBERDROLA ADR1 EO | KYUSHU EL vs. SSE PLC ADR | KYUSHU EL vs. C PARAN EN | KYUSHU EL vs. CIA ENGER ADR |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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