Correlation Between USWE Sports and Vitrolife

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Can any of the company-specific risk be diversified away by investing in both USWE Sports and Vitrolife 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 Vitrolife 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 Vitrolife AB, you can compare the effects of market volatilities on USWE Sports and Vitrolife 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 Vitrolife. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE Sports and Vitrolife.

Diversification Opportunities for USWE Sports and Vitrolife

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between USWE and Vitrolife is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports AB and Vitrolife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitrolife 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 Vitrolife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitrolife AB has no effect on the direction of USWE Sports i.e., USWE Sports and Vitrolife go up and down completely randomly.

Pair Corralation between USWE Sports and Vitrolife

Assuming the 90 days trading horizon USWE Sports AB is expected to generate 0.86 times more return on investment than Vitrolife. However, USWE Sports AB is 1.16 times less risky than Vitrolife. It trades about 0.53 of its potential returns per unit of risk. Vitrolife AB is currently generating about -0.1 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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

USWE Sports AB  vs.  Vitrolife AB

 Performance 
       Timeline  
USWE Sports AB 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in USWE Sports AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, USWE Sports unveiled solid returns over the last few months and may actually be approaching a breakup point.
Vitrolife AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

USWE Sports and Vitrolife Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with USWE Sports and Vitrolife

The main advantage of trading using opposite USWE Sports and Vitrolife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE Sports position performs unexpectedly, Vitrolife 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 Vitrolife will offset losses from the drop in Vitrolife's long position.
The idea behind USWE Sports AB and Vitrolife AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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