Correlation Between USWE Sports and Neola Medical

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

Diversification Opportunities for USWE Sports and Neola Medical

0.0

Correlation Coefficient

USWE Sports  Neola Medical

Pay attention - limited upside

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

Pair Corralation between USWE Sports and Neola Medical

Assuming the 90 days trading horizon USWE Sports is expected to generate 14.42 times less return on investment than Neola Medical. But when comparing it to its historical volatility, USWE Sports AB is 1.85 times less risky than Neola Medical. It trades about 0.02 of its potential returns per unit of risk. Neola Medical AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Neola Medical AB on December 21, 2024 and sell it today you would earn a total of  60.00  from holding Neola Medical AB or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

USWE Sports AB  vs.  Neola Medical AB

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. In spite of comparatively stable basic indicators, USWE Sports is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Neola Medical AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neola Medical AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Neola Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with USWE Sports and Neola Medical

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

The idea behind USWE Sports AB and Neola Medical 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.

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