Correlation Between USWE Sports and KABE Group
Can any of the company-specific risk be diversified away by investing in both USWE Sports and KABE Group 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 USWE Sports and KABE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE Sports AB and KABE Group AB, you can compare the effects of market volatilities on USWE Sports and KABE Group 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 USWE Sports with a short position of KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE Sports and KABE Group.
Diversification Opportunities for USWE Sports and KABE Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and KABE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports AB and KABE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KABE Group AB and USWE Sports 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 USWE Sports AB are associated (or correlated) with KABE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KABE Group AB has no effect on the direction of USWE Sports i.e., USWE Sports and KABE Group go up and down completely randomly.
Pair Corralation between USWE Sports and KABE Group
Assuming the 90 days trading horizon USWE Sports AB is expected to generate 1.39 times more return on investment than KABE Group. However, USWE Sports is 1.39 times more volatile than KABE Group AB. It trades about 0.53 of its potential returns per unit of risk. KABE Group AB is currently generating about 0.16 per unit of risk. If you would invest 885.00 in USWE Sports AB on October 24, 2024 and sell it today you would earn a total of 135.00 from holding USWE Sports AB or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE Sports AB vs. KABE Group AB
Performance |
| Timeline |
| USWE Sports AB |
| KABE Group AB |
USWE Sports and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE Sports and KABE Group
The main advantage of trading using opposite USWE Sports and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE Sports position performs unexpectedly, KABE Group 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 KABE Group will offset losses from the drop in KABE Group's long position.| USWE Sports vs. Awardit AB | USWE Sports vs. RVRC Holding AB | USWE Sports vs. MIPS AB | USWE Sports vs. Smart Eye AB |
| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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