Correlation Between USWE SPORTS and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and InPlay Oil 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 InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on USWE SPORTS and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and InPlay Oil.
Diversification Opportunities for USWE SPORTS and InPlay Oil
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USWE and InPlay is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and InPlay Oil go up and down completely randomly.
Pair Corralation between USWE SPORTS and InPlay Oil
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.92 times more return on investment than InPlay Oil. However, USWE SPORTS is 1.92 times more volatile than InPlay Oil Corp. It trades about 0.3 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.07 per unit of risk. If you would invest 60.00 in USWE SPORTS AB on August 25, 2024 and sell it today you would earn a total of 19.00 from holding USWE SPORTS AB or generate 31.67% 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. InPlay Oil Corp
Performance |
| Timeline |
| USWE SPORTS AB |
| InPlay Oil Corp |
USWE SPORTS and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and InPlay Oil
The main advantage of trading using opposite USWE SPORTS and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| USWE SPORTS vs. ANTA Sports Products | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Expedia Group | USWE SPORTS vs. Shimano |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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