Correlation Between USWE SPORTS and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on USWE SPORTS and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and STRAYER EDUCATION.
Diversification Opportunities for USWE SPORTS and STRAYER EDUCATION
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between USWE and STRAYER is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between USWE SPORTS and STRAYER EDUCATION
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the STRAYER EDUCATION. In addition to that, USWE SPORTS is 2.01 times more volatile than STRAYER EDUCATION. It trades about -0.02 of its total potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.03 per unit of volatility. If you would invest 7,553 in STRAYER EDUCATION on October 16, 2024 and sell it today you would earn a total of 1,297 from holding STRAYER EDUCATION or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. STRAYER EDUCATION
Performance |
| Timeline |
| USWE SPORTS AB |
| STRAYER EDUCATION |
USWE SPORTS and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and STRAYER EDUCATION
The main advantage of trading using opposite USWE SPORTS and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION'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 |
| STRAYER EDUCATION vs. Monster Beverage Corp | STRAYER EDUCATION vs. Playtech plc | STRAYER EDUCATION vs. USWE SPORTS AB | STRAYER EDUCATION vs. United Breweries Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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