Correlation Between USWE SPORTS and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and NISSIN FOODS 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 NISSIN FOODS 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 NISSIN FOODS HLDGS, you can compare the effects of market volatilities on USWE SPORTS and NISSIN FOODS 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 NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and NISSIN FOODS.
Diversification Opportunities for USWE SPORTS and NISSIN FOODS
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USWE and NISSIN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS 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 NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and NISSIN FOODS go up and down completely randomly.
Pair Corralation between USWE SPORTS and NISSIN FOODS
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.71 times more return on investment than NISSIN FOODS. However, USWE SPORTS is 1.71 times more volatile than NISSIN FOODS HLDGS. It trades about 0.29 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about -0.07 per unit of risk. If you would invest 60.00 in USWE SPORTS AB on August 27, 2024 and sell it today you would earn a total of 18.00 from holding USWE SPORTS AB or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. NISSIN FOODS HLDGS
Performance |
| Timeline |
| USWE SPORTS AB |
| NISSIN FOODS HLDGS |
USWE SPORTS and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and NISSIN FOODS
The main advantage of trading using opposite USWE SPORTS and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, NISSIN FOODS 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS's long position.The idea behind USWE SPORTS AB and NISSIN FOODS HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NISSIN FOODS vs. KENNAMETAL INC | NISSIN FOODS vs. GREENX METALS LTD | NISSIN FOODS vs. GALENA MINING LTD | NISSIN FOODS vs. MCEWEN MINING INC |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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