Correlation Between USWE SPORTS and Japan Medical

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

Diversification Opportunities for USWE SPORTS and Japan Medical

0.31

Correlation Coefficient

USWE SPORTS  Japan Medical

Weak diversification

The 3 months correlation between USWE and Japan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Japan Medical go up and down completely randomly.

Pair Corralation between USWE SPORTS and Japan Medical

Assuming the 90 days horizon USWE SPORTS is expected to generate 2.6 times less return on investment than Japan Medical. In addition to that, USWE SPORTS is 1.37 times more volatile than Japan Medical Dynamic. It trades about 0.02 of its total potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.07 per unit of volatility. If you would invest  353.00  in Japan Medical Dynamic on December 28, 2024 and sell it today you would earn a total of  26.00  from holding Japan Medical Dynamic or generate 7.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

USWE SPORTS AB  vs.  Japan Medical Dynamic

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Japan Medical Dynamic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Japan Medical Dynamic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Japan Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with USWE SPORTS and Japan Medical

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

The idea behind USWE SPORTS AB and Japan Medical Dynamic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.