Correlation Between USWE SPORTS and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on USWE SPORTS and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Strategic Investments.
Diversification Opportunities for USWE SPORTS and Strategic Investments
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and Strategic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Strategic Investments go up and down completely randomly.
Pair Corralation between USWE SPORTS and Strategic Investments
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.56 times more return on investment than Strategic Investments. However, USWE SPORTS AB is 1.79 times less risky than Strategic Investments. It trades about -0.2 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.2 per unit of risk. If you would invest 78.00 in USWE SPORTS AB on September 12, 2024 and sell it today you would lose (6.00) from holding USWE SPORTS AB or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Strategic Investments AS
Performance |
| Timeline |
| USWE SPORTS AB |
| Strategic Investments |
USWE SPORTS and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Strategic Investments
The main advantage of trading using opposite USWE SPORTS and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| USWE SPORTS vs. MARKET VECTR RETAIL | USWE SPORTS vs. ECHO INVESTMENT ZY | USWE SPORTS vs. COSTCO WHOLESALE CDR | USWE SPORTS vs. AGNC INVESTMENT |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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