Correlation Between USWE SPORTS and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and KOOL2PLAY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY, you can compare the effects of market volatilities on USWE SPORTS and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and KOOL2PLAY.
Diversification Opportunities for USWE SPORTS and KOOL2PLAY
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between USWE and KOOL2PLAY is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and KOOL2PLAY go up and down completely randomly.
Pair Corralation between USWE SPORTS and KOOL2PLAY
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the KOOL2PLAY. But the stock apears to be less risky and, when comparing its historical volatility, USWE SPORTS AB is 3.14 times less risky than KOOL2PLAY. The stock trades about -0.07 of its potential returns per unit of risk. The KOOL2PLAY SA ZY is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 15.00 in KOOL2PLAY SA ZY on November 27, 2024 and sell it today you would earn a total of 10.00 from holding KOOL2PLAY SA ZY or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| USWE SPORTS AB |
| KOOL2PLAY SA ZY |
USWE SPORTS and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and KOOL2PLAY
The main advantage of trading using opposite USWE SPORTS and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| USWE SPORTS vs. SmarTone Telecommunications Holdings | USWE SPORTS vs. 24SEVENOFFICE GROUP AB | USWE SPORTS vs. Hisense Home Appliances | USWE SPORTS vs. Ultra Clean Holdings |
| KOOL2PLAY vs. PLAYSTUDIOS A DL 0001 | KOOL2PLAY vs. ScanSource | KOOL2PLAY vs. THAI BEVERAGE | KOOL2PLAY vs. ANTA Sports Products |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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