Correlation Between USWE Sports and Sileon AB
Can any of the company-specific risk be diversified away by investing in both USWE Sports and Sileon AB 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 Sileon AB 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 Sileon AB, you can compare the effects of market volatilities on USWE Sports and Sileon AB 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE Sports and Sileon AB.
Diversification Opportunities for USWE Sports and Sileon AB
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USWE and Sileon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports AB and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of USWE Sports i.e., USWE Sports and Sileon AB go up and down completely randomly.
Pair Corralation between USWE Sports and Sileon AB
Assuming the 90 days trading horizon USWE Sports AB is expected to generate 0.63 times more return on investment than Sileon AB. However, USWE Sports AB is 1.58 times less risky than Sileon AB. It trades about -0.02 of its potential returns per unit of risk. Sileon AB is currently generating about -0.08 per unit of risk. If you would invest 2,040 in USWE Sports AB on October 15, 2024 and sell it today you would lose (1,115) from holding USWE Sports AB or give up 54.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE Sports AB vs. Sileon AB
Performance |
| Timeline |
| USWE Sports AB |
| Sileon AB |
USWE Sports and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE Sports and Sileon AB
The main advantage of trading using opposite USWE Sports and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE Sports position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB'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 |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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