Correlation Between USWE SPORTS and China Datang
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and China Datang 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 China Datang 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 China Datang, you can compare the effects of market volatilities on USWE SPORTS and China Datang 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 China Datang. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and China Datang.
Diversification Opportunities for USWE SPORTS and China Datang
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Datang 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 China Datang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Datang has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and China Datang go up and down completely randomly.
Pair Corralation between USWE SPORTS and China Datang
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.92 times more return on investment than China Datang. However, USWE SPORTS AB is 1.09 times less risky than China Datang. It trades about 0.25 of its potential returns per unit of risk. China Datang is currently generating about 0.1 per unit of risk. If you would invest 74.00 in USWE SPORTS AB on October 26, 2024 and sell it today you would earn a total of 8.00 from holding USWE SPORTS AB or generate 10.81% 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. China Datang
Performance |
| Timeline |
| USWE SPORTS AB |
| China Datang |
USWE SPORTS and China Datang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and China Datang
The main advantage of trading using opposite USWE SPORTS and China Datang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, China Datang 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 China Datang will offset losses from the drop in China Datang's long position.| USWE SPORTS vs. Booking Holdings | USWE SPORTS vs. Oriental Land Co | USWE SPORTS vs. ANTA Sports Products | USWE SPORTS vs. Li Ning Company |
| China Datang vs. NextEra Energy | China Datang vs. The Southern | China Datang vs. VERBUND AG | China Datang vs. PGE Corporation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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