Correlation Between USWE SPORTS and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on USWE SPORTS and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and SPDR Gold.
Diversification Opportunities for USWE SPORTS and SPDR Gold
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and SPDR is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and SPDR Gold go up and down completely randomly.
Pair Corralation between USWE SPORTS and SPDR Gold
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 3.14 times more return on investment than SPDR Gold. However, USWE SPORTS is 3.14 times more volatile than SPDR Gold Shares. It trades about 0.12 of its potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.16 per unit of risk. If you would invest 59.00 in USWE SPORTS AB on September 14, 2024 and sell it today you would earn a total of 14.00 from holding USWE SPORTS AB or generate 23.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
USWE SPORTS AB vs. SPDR Gold Shares
Performance |
| Timeline |
| USWE SPORTS AB |
| SPDR Gold Shares |
USWE SPORTS and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and SPDR Gold
The main advantage of trading using opposite USWE SPORTS and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. SIVERS SEMICONDUCTORS AB | USWE SPORTS vs. Norsk Hydro ASA | USWE SPORTS vs. Reliance Steel Aluminum |
| SPDR Gold vs. USWE SPORTS AB | SPDR Gold vs. ePlay Digital | SPDR Gold vs. TITANIUM TRANSPORTGROUP | SPDR Gold vs. Sixt Leasing SE |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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