Correlation Between Strategic Investments and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and USWE SPORTS 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 Strategic Investments and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and USWE SPORTS AB, you can compare the effects of market volatilities on Strategic Investments and USWE SPORTS 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 Strategic Investments with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and USWE SPORTS.
Diversification Opportunities for Strategic Investments and USWE SPORTS
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strategic and USWE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Strategic Investments i.e., Strategic Investments and USWE SPORTS go up and down completely randomly.
Pair Corralation between Strategic Investments and USWE SPORTS
Assuming the 90 days horizon Strategic Investments AS is expected to under-perform the USWE SPORTS. In addition to that, Strategic Investments is 1.79 times more volatile than USWE SPORTS AB. It trades about -0.2 of its total potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.2 per unit of volatility. If you would invest 78.00 in USWE SPORTS AB on September 12, 2024 and sell it today you would lose (6.00) from holding USWE SPORTS AB or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. USWE SPORTS AB
Performance |
| Timeline |
| Strategic Investments |
| USWE SPORTS AB |
Strategic Investments and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and USWE SPORTS
The main advantage of trading using opposite Strategic Investments and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
| USWE SPORTS vs. MARKET VECTR RETAIL | USWE SPORTS vs. ECHO INVESTMENT ZY | USWE SPORTS vs. COSTCO WHOLESALE CDR | USWE SPORTS vs. AGNC INVESTMENT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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