Correlation Between International Consolidated and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and USWE SPORTS AB, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and USWE SPORTS.
Diversification Opportunities for International Consolidated and USWE SPORTS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and USWE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and USWE SPORTS go up and down completely randomly.
Pair Corralation between International Consolidated and USWE SPORTS
Assuming the 90 days horizon International Consolidated Airlines is expected to generate 0.47 times more return on investment than USWE SPORTS. However, International Consolidated Airlines is 2.11 times less risky than USWE SPORTS. It trades about 0.08 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.03 per unit of risk. If you would invest 151.00 in International Consolidated Airlines on September 3, 2024 and sell it today you would earn a total of 160.00 from holding International Consolidated Airlines or generate 105.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. USWE SPORTS AB
Performance |
| Timeline |
| International Consolidated |
| USWE SPORTS AB |
International Consolidated and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and USWE SPORTS
The main advantage of trading using opposite International Consolidated and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Delta Air Lines | International Consolidated vs. AIR CHINA LTD | International Consolidated vs. RYANAIR HLDGS ADR | International Consolidated vs. Southwest Airlines Co |
| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. SHIMANO INC UNSPADR10 | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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