Correlation Between United States and TRADEDOUBLER

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

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

Diversification Opportunities for United States and TRADEDOUBLER

-0.11

Correlation Coefficient

United States  TRADEDOUBLER

Good diversification

The 3 months correlation between United and TRADEDOUBLER is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and United States 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 United States Steel are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of United States i.e., United States and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between United States and TRADEDOUBLER

Assuming the 90 days trading horizon United States Steel is expected to under-perform the TRADEDOUBLER. But the stock apears to be less risky and, when comparing its historical volatility, United States Steel is 1.11 times less risky than TRADEDOUBLER. The stock trades about -0.02 of its potential returns per unit of risk. The TRADEDOUBLER AB SK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  27.00  in TRADEDOUBLER AB SK on October 7, 2024 and sell it today you would earn a total of  2.00  from holding TRADEDOUBLER AB SK or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

United States Steel  vs.  TRADEDOUBLER AB SK

United States Steel

Risk-Adjusted Performance

0 of 100

Weak

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

TRADEDOUBLER AB SK

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with United States and TRADEDOUBLER

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

The idea behind United States Steel and TRADEDOUBLER AB SK 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 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.