Correlation Between USWE SPORTS and Airbus SE

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

Diversification Opportunities for USWE SPORTS and Airbus SE

0.88

Correlation Coefficient

USWE SPORTS  Airbus SE

Very poor diversification

The 3 months correlation between USWE and Airbus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and Airbus SE go up and down completely randomly.

Pair Corralation between USWE SPORTS and Airbus SE

Assuming the 90 days horizon USWE SPORTS AB is expected to generate 2.41 times more return on investment than Airbus SE. However, USWE SPORTS is 2.41 times more volatile than Airbus SE. It trades about 0.23 of its potential returns per unit of risk. Airbus SE is currently generating about 0.34 per unit of risk. If you would invest  65.00  in USWE SPORTS AB on April 20, 2025 and sell it today you would earn a total of  42.00  from holding USWE SPORTS AB or generate 64.62% return on investment over 90 days.

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

USWE SPORTS AB  vs.  Airbus SE

USWE SPORTS AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in USWE SPORTS AB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, USWE SPORTS reported solid returns over the last few months and may actually be approaching a breakup point.

Airbus SE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Airbus SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with USWE SPORTS and Airbus SE

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

The idea behind USWE SPORTS AB and Airbus SE 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 Commodity Directory module to find actively traded commodities issued by global exchanges.