Correlation Between USWE SPORTS and GFL ENVIRONM(SUBVTSH

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

Diversification Opportunities for USWE SPORTS and GFL ENVIRONM(SUBVTSH

-0.36

Correlation Coefficient

USWE SPORTS  GFL ENVIRONM(SUBVTSH

Very good diversification

The 3 months correlation between USWE and GFL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and GFL ENVIRONM(SUBVTSH go up and down completely randomly.

Pair Corralation between USWE SPORTS and GFL ENVIRONM(SUBVTSH

Assuming the 90 days horizon USWE SPORTS is expected to generate 1.5 times less return on investment than GFL ENVIRONM(SUBVTSH. In addition to that, USWE SPORTS is 1.34 times more volatile than GFL ENVIRONM. It trades about 0.02 of its total potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.04 per unit of volatility. If you would invest  4,259  in GFL ENVIRONM on December 27, 2024 and sell it today you would earn a total of  161.00  from holding GFL ENVIRONM or generate 3.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

USWE SPORTS AB  vs.  GFL ENVIRONM

USWE SPORTS AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in USWE SPORTS AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, USWE SPORTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GFL ENVIRONM are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GFL ENVIRONM(SUBVTSH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with USWE SPORTS and GFL ENVIRONM(SUBVTSH

The main advantage of trading using opposite USWE SPORTS and GFL ENVIRONM(SUBVTSH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH will offset losses from the drop in GFL ENVIRONM(SUBVTSH's long position.

The idea behind USWE SPORTS AB and GFL ENVIRONM 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.

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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.