Correlation Between Shimano and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Shimano 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 Shimano and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano and USWE SPORTS AB, you can compare the effects of market volatilities on Shimano 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 Shimano with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and USWE SPORTS.
Diversification Opportunities for Shimano and USWE SPORTS
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shimano and USWE is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shimano 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 Shimano 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 Shimano 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 Shimano i.e., Shimano and USWE SPORTS go up and down completely randomly.
Pair Corralation between Shimano and USWE SPORTS
Assuming the 90 days horizon Shimano is expected to generate 0.45 times more return on investment than USWE SPORTS. However, Shimano is 2.23 times less risky than USWE SPORTS. It trades about -0.01 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.02 per unit of risk. If you would invest 16,300 in Shimano on October 19, 2024 and sell it today you would lose (3,170) from holding Shimano or give up 19.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimano vs. USWE SPORTS AB
Performance |
| Timeline |
| Shimano |
| USWE SPORTS AB |
Shimano and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and USWE SPORTS
The main advantage of trading using opposite Shimano and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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.| Shimano vs. Booking Holdings | Shimano vs. Oriental Land Co | Shimano vs. ANTA Sports Products | Shimano vs. Li Ning Company |
| USWE SPORTS vs. Cincinnati Financial Corp | USWE SPORTS vs. UNIQA INSURANCE GR | USWE SPORTS vs. STORE ELECTRONIC | USWE SPORTS vs. LPKF Laser Electronics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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