Correlation Between USWE SPORTS and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on USWE SPORTS and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and SCOTT TECHNOLOGY.
Diversification Opportunities for USWE SPORTS and SCOTT TECHNOLOGY
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and SCOTT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between USWE SPORTS and SCOTT TECHNOLOGY
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.98 times more return on investment than SCOTT TECHNOLOGY. However, USWE SPORTS AB is 1.02 times less risky than SCOTT TECHNOLOGY. It trades about -0.02 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about -0.04 per unit of risk. If you would invest 125.00 in USWE SPORTS AB on December 7, 2024 and sell it today you would lose (42.00) from holding USWE SPORTS AB or give up 33.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| USWE SPORTS AB |
| SCOTT TECHNOLOGY |
USWE SPORTS and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and SCOTT TECHNOLOGY
The main advantage of trading using opposite USWE SPORTS and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| USWE SPORTS vs. Samsung Electronics Co | USWE SPORTS vs. Singapore Airlines Limited | USWE SPORTS vs. KIMBALL ELECTRONICS | USWE SPORTS vs. United Airlines Holdings |
| SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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