Correlation Between USWE Sports and OssDsign

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

Diversification Opportunities for USWE Sports and OssDsign

0.24

Correlation Coefficient

USWE Sports  OssDsign

Modest diversification

The 3 months correlation between USWE and OssDsign is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports AB and OssDsign AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OssDsign 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 OssDsign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OssDsign AB has no effect on the direction of USWE Sports i.e., USWE Sports and OssDsign go up and down completely randomly.

Pair Corralation between USWE Sports and OssDsign

Assuming the 90 days trading horizon USWE Sports is expected to generate 3.79 times less return on investment than OssDsign. In addition to that, USWE Sports is 1.26 times more volatile than OssDsign AB. It trades about 0.07 of its total potential returns per unit of risk. OssDsign AB is currently generating about 0.34 per unit of volatility. If you would invest  935.00  in OssDsign AB on October 5, 2024 and sell it today you would earn a total of  99.00  from holding OssDsign AB or generate 10.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

USWE Sports AB  vs.  OssDsign AB

USWE Sports AB

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days USWE Sports AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, USWE Sports unveiled solid returns over the last few months and may actually be approaching a breakup point.

OssDsign AB

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OssDsign AB are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OssDsign unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with USWE Sports and OssDsign

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

The idea behind USWE Sports AB and OssDsign 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.