Correlation Between USWE SPORTS and Apple
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on USWE SPORTS and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Apple.
Diversification Opportunities for USWE SPORTS and Apple
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and Apple is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Apple go up and down completely randomly.
Pair Corralation between USWE SPORTS and Apple
Assuming the 90 days horizon USWE SPORTS is expected to generate 1.51 times less return on investment than Apple. In addition to that, USWE SPORTS is 1.86 times more volatile than Apple Inc. It trades about 0.06 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.17 per unit of volatility. If you would invest 21,370 in Apple Inc on October 17, 2024 and sell it today you would earn a total of 1,510 from holding Apple Inc or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Apple Inc
Performance |
| Timeline |
| USWE SPORTS AB |
| Apple Inc |
USWE SPORTS and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Apple
The main advantage of trading using opposite USWE SPORTS and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple'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 |
| Apple vs. USWE SPORTS AB | Apple vs. ePlay Digital | Apple vs. Aristocrat Leisure Limited | Apple vs. SUN LIFE FINANCIAL |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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