Correlation Between USWE SPORTS and John Bean
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and John Bean 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 John Bean 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 John Bean Technologies, you can compare the effects of market volatilities on USWE SPORTS and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and John Bean.
Diversification Opportunities for USWE SPORTS and John Bean
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between USWE and John is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and John Bean go up and down completely randomly.
Pair Corralation between USWE SPORTS and John Bean
Assuming the 90 days horizon USWE SPORTS is expected to generate 2.43 times less return on investment than John Bean. In addition to that, USWE SPORTS is 1.02 times more volatile than John Bean Technologies. It trades about 0.14 of its total potential returns per unit of risk. John Bean Technologies is currently generating about 0.34 per unit of volatility. If you would invest 10,200 in John Bean Technologies on September 4, 2024 and sell it today you would earn a total of 1,500 from holding John Bean Technologies or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. John Bean Technologies
Performance |
| Timeline |
| USWE SPORTS AB |
| John Bean Technologies |
USWE SPORTS and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and John Bean
The main advantage of trading using opposite USWE SPORTS and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| USWE SPORTS vs. SCANSOURCE | USWE SPORTS vs. Uber Technologies | USWE SPORTS vs. GALENA MINING LTD | USWE SPORTS vs. Playtech plc |
| John Bean vs. RETAIL FOOD GROUP | John Bean vs. National Retail Properties | John Bean vs. QURATE RETAIL INC | John Bean vs. Retail Estates NV |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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