Correlation Between Lidds AB and USWE Sports

Can any of the company-specific risk be diversified away by investing in both Lidds AB and USWE Sports 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 Lidds AB and USWE Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lidds AB and USWE Sports AB, you can compare the effects of market volatilities on Lidds AB and USWE Sports 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 Lidds AB with a short position of USWE Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lidds AB and USWE Sports.

Diversification Opportunities for Lidds AB and USWE Sports

0.0

Correlation Coefficient

Lidds AB  USWE Sports

Pay attention - limited upside

The 3 months correlation between Lidds and USWE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lidds AB and USWE Sports AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE Sports AB and Lidds AB 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 Lidds AB are associated (or correlated) with USWE Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE Sports AB has no effect on the direction of Lidds AB i.e., Lidds AB and USWE Sports go up and down completely randomly.

Pair Corralation between Lidds AB and USWE Sports

If you would invest  710.00  in USWE Sports AB on October 7, 2024 and sell it today you would earn a total of  210.00  from holding USWE Sports AB or generate 29.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Lidds AB  vs.  USWE Sports AB

Lidds AB

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Lidds AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lidds AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

USWE Sports AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in USWE Sports AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, USWE Sports unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lidds AB and USWE Sports

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

The idea behind Lidds AB and USWE Sports 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.