Correlation Between USWE SPORTS and MPH Health
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on USWE SPORTS and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and MPH Health.
Diversification Opportunities for USWE SPORTS and MPH Health
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and MPH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and MPH Health go up and down completely randomly.
Pair Corralation between USWE SPORTS and MPH Health
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 3.58 times more return on investment than MPH Health. However, USWE SPORTS is 3.58 times more volatile than MPH Health Care. It trades about 0.35 of its potential returns per unit of risk. MPH Health Care is currently generating about -0.31 per unit of risk. If you would invest 72.00 in USWE SPORTS AB on November 7, 2024 and sell it today you would earn a total of 13.00 from holding USWE SPORTS AB or generate 18.06% 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. MPH Health Care
Performance |
| Timeline |
| USWE SPORTS AB |
| MPH Health Care |
USWE SPORTS and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and MPH Health
The main advantage of trading using opposite USWE SPORTS and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| USWE SPORTS vs. AOYAMA TRADING | USWE SPORTS vs. ECHO INVESTMENT ZY | USWE SPORTS vs. AGNC INVESTMENT | USWE SPORTS vs. Gladstone Investment |
| MPH Health vs. SIVERS SEMICONDUCTORS AB | MPH Health vs. NorAm Drilling AS | MPH Health vs. Volkswagen AG | MPH Health vs. Darden Restaurants |
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 CEOs Directory module to screen CEOs from public companies around the world.
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