Correlation Between USWE SPORTS and QUALCOMM Incorporated
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and QUALCOMM Incorporated 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 QUALCOMM Incorporated 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 QUALCOMM Incorporated, you can compare the effects of market volatilities on USWE SPORTS and QUALCOMM Incorporated 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 QUALCOMM Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and QUALCOMM Incorporated.
Diversification Opportunities for USWE SPORTS and QUALCOMM Incorporated
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and QUALCOMM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and QUALCOMM Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM Incorporated 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 QUALCOMM Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM Incorporated has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and QUALCOMM Incorporated go up and down completely randomly.
Pair Corralation between USWE SPORTS and QUALCOMM Incorporated
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.6 times more return on investment than QUALCOMM Incorporated. However, USWE SPORTS is 1.6 times more volatile than QUALCOMM Incorporated. It trades about 0.08 of its potential returns per unit of risk. QUALCOMM Incorporated is currently generating about 0.07 per unit of risk. If you would invest 73.00 in USWE SPORTS AB on October 16, 2024 and sell it today you would earn a total of 2.00 from holding USWE SPORTS AB or generate 2.74% 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. QUALCOMM Incorporated
Performance |
| Timeline |
| USWE SPORTS AB |
| QUALCOMM Incorporated |
USWE SPORTS and QUALCOMM Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and QUALCOMM Incorporated
The main advantage of trading using opposite USWE SPORTS and QUALCOMM Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, QUALCOMM Incorporated 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 QUALCOMM Incorporated will offset losses from the drop in QUALCOMM Incorporated's long position.| USWE SPORTS vs. ON SEMICONDUCTOR | USWE SPORTS vs. TOREX SEMICONDUCTOR LTD | USWE SPORTS vs. Magnachip Semiconductor | USWE SPORTS vs. Semiconductor Manufacturing International |
| QUALCOMM Incorporated vs. ARISTOCRAT LEISURE | QUALCOMM Incorporated vs. USWE SPORTS AB | QUALCOMM Incorporated vs. COLUMBIA SPORTSWEAR | QUALCOMM Incorporated vs. PLAYTECH |
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 CEOs Directory module to screen CEOs from public companies around the world.
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