Correlation Between USWE SPORTS and GFL ENVIRONM(SUBVTSH
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM, you can compare the effects of market volatilities on USWE SPORTS and GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and GFL ENVIRONM(SUBVTSH.
Diversification Opportunities for USWE SPORTS and GFL ENVIRONM(SUBVTSH
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between USWE and GFL is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and GFL ENVIRONM(SUBVTSH go up and down completely randomly.
Pair Corralation between USWE SPORTS and GFL ENVIRONM(SUBVTSH
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 2.32 times more return on investment than GFL ENVIRONM(SUBVTSH. However, USWE SPORTS is 2.32 times more volatile than GFL ENVIRONM. It trades about 0.27 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.32 per unit of risk. If you would invest 59.00 in USWE SPORTS AB on August 31, 2024 and sell it today you would earn a total of 17.00 from holding USWE SPORTS AB or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. GFL ENVIRONM
Performance |
| Timeline |
| USWE SPORTS AB |
| GFL ENVIRONM(SUBVTSH |
USWE SPORTS and GFL ENVIRONM(SUBVTSH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and GFL ENVIRONM(SUBVTSH
The main advantage of trading using opposite USWE SPORTS and GFL ENVIRONM(SUBVTSH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH will offset losses from the drop in GFL ENVIRONM(SUBVTSH's long position.| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| GFL ENVIRONM(SUBVTSH vs. Ming Le Sports | GFL ENVIRONM(SUBVTSH vs. CHINA EDUCATION GROUP | GFL ENVIRONM(SUBVTSH vs. USWE SPORTS AB | GFL ENVIRONM(SUBVTSH vs. Transport International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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