Correlation Between USWE SPORTS and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies, you can compare the effects of market volatilities on USWE SPORTS and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and SolarEdge Technologies.
Diversification Opportunities for USWE SPORTS and SolarEdge Technologies
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USWE and SolarEdge is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between USWE SPORTS and SolarEdge Technologies
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the SolarEdge Technologies. But the stock apears to be less risky and, when comparing its historical volatility, USWE SPORTS AB is 4.79 times less risky than SolarEdge Technologies. The stock trades about -0.18 of its potential returns per unit of risk. The SolarEdge Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,192 in SolarEdge Technologies on September 15, 2024 and sell it today you would earn a total of 80.00 from holding SolarEdge Technologies or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. SolarEdge Technologies
Performance |
| Timeline |
| USWE SPORTS AB |
| SolarEdge Technologies |
USWE SPORTS and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and SolarEdge Technologies
The main advantage of trading using opposite USWE SPORTS and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. SIVERS SEMICONDUCTORS AB | USWE SPORTS vs. Norsk Hydro ASA | USWE SPORTS vs. Reliance Steel Aluminum |
| SolarEdge Technologies vs. Commercial Vehicle Group | SolarEdge Technologies vs. Collins Foods Limited | SolarEdge Technologies vs. MOLSON RS BEVERAGE | SolarEdge Technologies vs. Cal Maine Foods |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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