Correlation Between USWE SPORTS and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on USWE SPORTS and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Thyssenkrupp.
Diversification Opportunities for USWE SPORTS and Thyssenkrupp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and Thyssenkrupp is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Thyssenkrupp go up and down completely randomly.
Pair Corralation between USWE SPORTS and Thyssenkrupp
Assuming the 90 days horizon USWE SPORTS is expected to generate 279.85 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, USWE SPORTS AB is 4.7 times less risky than Thyssenkrupp. It trades about 0.01 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 456.00 in thyssenkrupp AG on December 11, 2024 and sell it today you would earn a total of 439.00 from holding thyssenkrupp AG or generate 96.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. thyssenkrupp AG
Performance |
| Timeline |
| USWE SPORTS AB |
| thyssenkrupp AG |
USWE SPORTS and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Thyssenkrupp
The main advantage of trading using opposite USWE SPORTS and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| USWE SPORTS vs. NORDHEALTH AS NK | USWE SPORTS vs. Natural Health Trends | USWE SPORTS vs. Siemens Healthineers AG | USWE SPORTS vs. CARDINAL HEALTH |
| Thyssenkrupp vs. Cardinal Health | Thyssenkrupp vs. NIGHTINGALE HEALTH EO | Thyssenkrupp vs. NORDHEALTH AS NK | Thyssenkrupp vs. ScanSource |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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