Correlation Between United States and Sporttotal
Can any of the company-specific risk be diversified away by investing in both United States and Sporttotal 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 United States and Sporttotal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Sporttotal AG, you can compare the effects of market volatilities on United States and Sporttotal 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 United States with a short position of Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Sporttotal.
Diversification Opportunities for United States and Sporttotal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Sporttotal is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG and United States 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 United States Steel are associated (or correlated) with Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of United States i.e., United States and Sporttotal go up and down completely randomly.
Pair Corralation between United States and Sporttotal
Assuming the 90 days trading horizon United States Steel is expected to generate 0.71 times more return on investment than Sporttotal. However, United States Steel is 1.4 times less risky than Sporttotal. It trades about 0.05 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.23 per unit of risk. If you would invest 3,579 in United States Steel on August 29, 2024 and sell it today you would earn a total of 79.00 from holding United States Steel or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United States Steel vs. Sporttotal AG
Performance |
| Timeline |
| United States Steel |
| Sporttotal AG |
United States and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Sporttotal
The main advantage of trading using opposite United States and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| United States vs. Steel Dynamics | United States vs. NIPPON STEEL SPADR | United States vs. Superior Plus Corp | United States vs. SIVERS SEMICONDUCTORS AB |
| Sporttotal vs. UNITED UTILITIES GR | Sporttotal vs. BORR DRILLING NEW | Sporttotal vs. MagnaChip Semiconductor Corp | Sporttotal vs. Tianjin Capital Environmental |
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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