Correlation Between Sportradar Group and China Coal

Can any of the company-specific risk be diversified away by investing in both Sportradar Group and China Coal 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 Sportradar Group and China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sportradar Group AG and China Coal Energy, you can compare the effects of market volatilities on Sportradar Group and China Coal 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 Sportradar Group with a short position of China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportradar Group and China Coal.

Diversification Opportunities for Sportradar Group and China Coal

0.0

Correlation Coefficient

Sportradar Group  China Coal

Pay attention - limited upside

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

Pair Corralation between Sportradar Group and China Coal

If you would invest  1,163  in Sportradar Group AG on August 30, 2024 and sell it today you would earn a total of  550.00  from holding Sportradar Group AG or generate 47.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sportradar Group AG  vs.  China Coal Energy

Sportradar Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sportradar Group AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sportradar Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

China Coal Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Coal Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, China Coal is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sportradar Group and China Coal

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

The idea behind Sportradar Group AG and China Coal Energy 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.