Correlation Between SPORTING and CME
Can any of the company-specific risk be diversified away by investing in both SPORTING and CME 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 SPORTING and CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and CME Group, you can compare the effects of market volatilities on SPORTING and CME 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 SPORTING with a short position of CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and CME.
Diversification Opportunities for SPORTING and CME
Very good diversification
The 3 months correlation between SPORTING and CME is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group and SPORTING 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 SPORTING are associated (or correlated) with CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of SPORTING i.e., SPORTING and CME go up and down completely randomly.
Pair Corralation between SPORTING and CME
Assuming the 90 days trading horizon SPORTING is expected to under-perform the CME. In addition to that, SPORTING is 3.51 times more volatile than CME Group. It trades about -0.06 of its total potential returns per unit of risk. CME Group is currently generating about 0.13 per unit of volatility. If you would invest 20,949 in CME Group on October 11, 2024 and sell it today you would earn a total of 1,221 from holding CME Group or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
SPORTING vs. CME Group
Performance |
| Timeline |
| SPORTING |
| CME Group |
SPORTING and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and CME
The main advantage of trading using opposite SPORTING and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| SPORTING vs. GameStop Corp | SPORTING vs. CENTURIA OFFICE REIT | SPORTING vs. Tower One Wireless | SPORTING vs. PLAYMATES TOYS |
| CME vs. SPORTING | CME vs. PARKEN Sport Entertainment | CME vs. Transport International Holdings | CME vs. MAVEN WIRELESS SWEDEN |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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