Correlation Between USWE SPORTS and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and AMADEUS IT 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 AMADEUS IT 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 AMADEUS IT GRP, you can compare the effects of market volatilities on USWE SPORTS and AMADEUS IT 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 AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and AMADEUS IT.
Diversification Opportunities for USWE SPORTS and AMADEUS IT
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and AMADEUS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and AMADEUS IT go up and down completely randomly.
Pair Corralation between USWE SPORTS and AMADEUS IT
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the AMADEUS IT. In addition to that, USWE SPORTS is 2.41 times more volatile than AMADEUS IT GRP. It trades about -0.06 of its total potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.02 per unit of volatility. If you would invest 6,359 in AMADEUS IT GRP on September 1, 2024 and sell it today you would earn a total of 241.00 from holding AMADEUS IT GRP or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.53% |
| Values | Daily Returns |
USWE SPORTS AB vs. AMADEUS IT GRP
Performance |
| Timeline |
| USWE SPORTS AB |
| AMADEUS IT GRP |
USWE SPORTS and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and AMADEUS IT
The main advantage of trading using opposite USWE SPORTS and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT's long position.| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| AMADEUS IT vs. HK Electric Investments | AMADEUS IT vs. Chuangs China Investments | AMADEUS IT vs. American Airlines Group | AMADEUS IT vs. Virtus Investment Partners |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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