Correlation Between USWE SPORTS and China Resources
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and China Resources 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 Resources 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 Resources Gas, you can compare the effects of market volatilities on USWE SPORTS and China Resources 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 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and China Resources.
Diversification Opportunities for USWE SPORTS and China Resources
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas 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 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Gas has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and China Resources go up and down completely randomly.
Pair Corralation between USWE SPORTS and China Resources
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, USWE SPORTS AB is 1.34 times less risky than China Resources. The stock trades about -0.1 of its potential returns per unit of risk. The China Resources Gas is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 348.00 in China Resources Gas on September 14, 2024 and sell it today you would earn a total of 12.00 from holding China Resources Gas or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. China Resources Gas
Performance |
| Timeline |
| USWE SPORTS AB |
| China Resources Gas |
USWE SPORTS and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and China Resources
The main advantage of trading using opposite USWE SPORTS and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' 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 |
| China Resources vs. USWE SPORTS AB | China Resources vs. Ming Le Sports | China Resources vs. Japan Asia Investment | China Resources vs. Playtech plc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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