Correlation Between USWE SPORTS and Air Transport
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on USWE SPORTS and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Air Transport.
Diversification Opportunities for USWE SPORTS and Air Transport
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USWE and Air is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Air Transport go up and down completely randomly.
Pair Corralation between USWE SPORTS and Air Transport
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 4.61 times more return on investment than Air Transport. However, USWE SPORTS is 4.61 times more volatile than Air Transport Services. It trades about 0.14 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.13 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 10.00 from holding USWE SPORTS AB or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Air Transport Services
Performance |
| Timeline |
| USWE SPORTS AB |
| Air Transport Services |
USWE SPORTS and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Air Transport
The main advantage of trading using opposite USWE SPORTS and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| USWE SPORTS vs. PROSIEBENSAT1 MEDIADR4 | USWE SPORTS vs. GigaMedia | USWE SPORTS vs. ZINC MEDIA GR | USWE SPORTS vs. Fuji Media Holdings |
| Air Transport vs. Planet Fitness | Air Transport vs. CHINA EDUCATION GROUP | Air Transport vs. Cardinal Health | Air Transport vs. Siemens Healthineers AG |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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