Correlation Between USWE SPORTS and SPORT LISBOA
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and SPORT LISBOA 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 SPORT LISBOA 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 SPORT LISBOA E, you can compare the effects of market volatilities on USWE SPORTS and SPORT LISBOA 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 SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and SPORT LISBOA.
Diversification Opportunities for USWE SPORTS and SPORT LISBOA
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and SPORT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SPORT LISBOA E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORT LISBOA E 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 SPORT LISBOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORT LISBOA E has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and SPORT LISBOA go up and down completely randomly.
Pair Corralation between USWE SPORTS and SPORT LISBOA
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.91 times more return on investment than SPORT LISBOA. However, USWE SPORTS AB is 1.09 times less risky than SPORT LISBOA. It trades about 0.08 of its potential returns per unit of risk. SPORT LISBOA E is currently generating about 0.03 per unit of risk. If you would invest 76.00 in USWE SPORTS AB on October 19, 2024 and sell it today you would earn a total of 5.00 from holding USWE SPORTS AB or generate 6.58% 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. SPORT LISBOA E
Performance |
| Timeline |
| USWE SPORTS AB |
| SPORT LISBOA E |
USWE SPORTS and SPORT LISBOA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and SPORT LISBOA
The main advantage of trading using opposite USWE SPORTS and SPORT LISBOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, SPORT LISBOA 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 SPORT LISBOA will offset losses from the drop in SPORT LISBOA's long position.| USWE SPORTS vs. Cincinnati Financial Corp | USWE SPORTS vs. UNIQA INSURANCE GR | USWE SPORTS vs. STORE ELECTRONIC | USWE SPORTS vs. LPKF Laser Electronics |
| SPORT LISBOA vs. GOODYEAR T RUBBER | SPORT LISBOA vs. TRI CHEMICAL LABORATINC | SPORT LISBOA vs. CHEMICAL INDUSTRIES | SPORT LISBOA vs. VULCAN MATERIALS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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