Correlation Between USWE SPORTS and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on USWE SPORTS and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and ALGOMA STEEL.
Diversification Opportunities for USWE SPORTS and ALGOMA STEEL
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and ALGOMA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between USWE SPORTS and ALGOMA STEEL
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.84 times more return on investment than ALGOMA STEEL. However, USWE SPORTS AB is 1.19 times less risky than ALGOMA STEEL. It trades about -0.04 of its potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about -0.25 per unit of risk. If you would invest 78.00 in USWE SPORTS AB on October 16, 2024 and sell it today you would lose (3.00) from holding USWE SPORTS AB or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| USWE SPORTS AB |
| ALGOMA STEEL GROUP |
USWE SPORTS and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and ALGOMA STEEL
The main advantage of trading using opposite USWE SPORTS and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| USWE SPORTS vs. Hitachi Construction Machinery | USWE SPORTS vs. Titan Machinery | USWE SPORTS vs. ECHO INVESTMENT ZY | USWE SPORTS vs. Sterling Construction |
| ALGOMA STEEL vs. USWE SPORTS AB | ALGOMA STEEL vs. Playmates Toys Limited | ALGOMA STEEL vs. InPlay Oil Corp | ALGOMA STEEL vs. T MOBILE INCDL 00001 |
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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