Correlation Between USWE SPORTS and VONOVIA SE

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

Diversification Opportunities for USWE SPORTS and VONOVIA SE

0.43

Correlation Coefficient

USWE SPORTS  VONOVIA SE

Very weak diversification

The 3 months correlation between USWE and VONOVIA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and VONOVIA SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VONOVIA SE ADR 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 VONOVIA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VONOVIA SE ADR has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and VONOVIA SE go up and down completely randomly.

Pair Corralation between USWE SPORTS and VONOVIA SE

Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.96 times more return on investment than VONOVIA SE. However, USWE SPORTS is 1.96 times more volatile than VONOVIA SE ADR. It trades about 0.29 of its potential returns per unit of risk. VONOVIA SE ADR is currently generating about 0.06 per unit of risk. If you would invest  63.00  in USWE SPORTS AB on April 24, 2025 and sell it today you would earn a total of  58.00  from holding USWE SPORTS AB or generate 92.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

USWE SPORTS AB  vs.  VONOVIA SE ADR

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 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, USWE SPORTS reported solid returns over the last few months and may actually be approaching a breakup point.

VONOVIA SE ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VONOVIA SE ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VONOVIA SE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with USWE SPORTS and VONOVIA SE

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

The idea behind USWE SPORTS AB and VONOVIA SE ADR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.