Correlation Between USWE SPORTS and Ambea AB
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and Ambea AB 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 Ambea AB 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 Ambea AB, you can compare the effects of market volatilities on USWE SPORTS and Ambea AB 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 Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Ambea AB.
Diversification Opportunities for USWE SPORTS and Ambea AB
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and Ambea is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB 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 Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Ambea AB go up and down completely randomly.
Pair Corralation between USWE SPORTS and Ambea AB
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the Ambea AB. In addition to that, USWE SPORTS is 1.03 times more volatile than Ambea AB. It trades about -0.02 of its total potential returns per unit of risk. Ambea AB is currently generating about 0.1 per unit of volatility. If you would invest 167.00 in Ambea AB on October 7, 2024 and sell it today you would earn a total of 670.00 from holding Ambea AB or generate 401.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Ambea AB
Performance |
| Timeline |
| USWE SPORTS AB |
| Ambea AB |
USWE SPORTS and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Ambea AB
The main advantage of trading using opposite USWE SPORTS and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB's long position.| USWE SPORTS vs. Oriental Land Co | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings | USWE SPORTS vs. SIVERS SEMICONDUCTORS AB |
| Ambea AB vs. National Beverage Corp | Ambea AB vs. DIVERSIFIED ROYALTY | Ambea AB vs. Chuangs China Investments | Ambea AB vs. MOLSON RS BEVERAGE |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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