Correlation Between USWE SPORTS and National Health
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on USWE SPORTS and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and National Health.
Diversification Opportunities for USWE SPORTS and National Health
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between USWE and National is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and National Health go up and down completely randomly.
Pair Corralation between USWE SPORTS and National Health
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.54 times more return on investment than National Health. However, USWE SPORTS is 1.54 times more volatile than National Health Investors. It trades about 0.21 of its potential returns per unit of risk. National Health Investors is currently generating about -0.01 per unit of risk. If you would invest 56.00 in USWE SPORTS AB on August 31, 2024 and sell it today you would earn a total of 20.00 from holding USWE SPORTS AB or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. National Health Investors
Performance |
| Timeline |
| USWE SPORTS AB |
| National Health Investors |
USWE SPORTS and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and National Health
The main advantage of trading using opposite USWE SPORTS and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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