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
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between USWE and Air is 0.97. 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 under-perform the Air Transport. In addition to that, USWE SPORTS is 1.43 times more volatile than Air Transport Services. It trades about -0.02 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.03 per unit of volatility. If you would invest 1,730 in Air Transport Services on August 31, 2024 and sell it today you would earn a total of 350.00 from holding Air Transport Services or generate 20.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| 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. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| Air Transport vs. AENA SME UNSPADR110 | Air Transport vs. Superior Plus Corp | Air Transport vs. NMI Holdings | Air Transport vs. Origin Agritech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |