Correlation Between SPORTING and USS
Can any of the company-specific risk be diversified away by investing in both SPORTING and USS 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 USS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and USS Co, you can compare the effects of market volatilities on SPORTING and USS 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 USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and USS.
Diversification Opportunities for SPORTING and USS
Very good diversification
The 3 months correlation between SPORTING and USS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of SPORTING i.e., SPORTING and USS go up and down completely randomly.
Pair Corralation between SPORTING and USS
Assuming the 90 days trading horizon SPORTING is expected to generate 1.54 times more return on investment than USS. However, SPORTING is 1.54 times more volatile than USS Co. It trades about 0.03 of its potential returns per unit of risk. USS Co is currently generating about 0.03 per unit of risk. If you would invest 78.00 in SPORTING on October 13, 2024 and sell it today you would earn a total of 14.00 from holding SPORTING or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPORTING vs. USS Co
Performance |
| Timeline |
| SPORTING |
| USS Co |
SPORTING and USS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and USS
The main advantage of trading using opposite SPORTING and USS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING position performs unexpectedly, USS 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 USS will offset losses from the drop in USS's long position.| SPORTING vs. H2O Retailing | SPORTING vs. PLANT VEDA FOODS | SPORTING vs. BURLINGTON STORES | SPORTING vs. EBRO FOODS |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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