Correlation Between Canadian Utilities and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and USWE SPORTS 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 Canadian Utilities and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and USWE SPORTS AB, you can compare the effects of market volatilities on Canadian Utilities and USWE SPORTS 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 Canadian Utilities with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and USWE SPORTS.
Diversification Opportunities for Canadian Utilities and USWE SPORTS
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and USWE is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and Canadian Utilities 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 Canadian Utilities Limited are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and USWE SPORTS go up and down completely randomly.
Pair Corralation between Canadian Utilities and USWE SPORTS
Assuming the 90 days horizon Canadian Utilities is expected to generate 24.6 times less return on investment than USWE SPORTS. But when comparing it to its historical volatility, Canadian Utilities Limited is 5.34 times less risky than USWE SPORTS. It trades about 0.05 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 65.00 in USWE SPORTS AB on April 21, 2025 and sell it today you would earn a total of 46.00 from holding USWE SPORTS AB or generate 70.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Utilities Limited vs. USWE SPORTS AB
Performance |
Timeline |
Canadian Utilities |
USWE SPORTS AB |
Canadian Utilities and USWE SPORTS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Utilities and USWE SPORTS
The main advantage of trading using opposite Canadian Utilities and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.Canadian Utilities vs. Metallurgical of | Canadian Utilities vs. Performance Food Group | Canadian Utilities vs. Lion One Metals | Canadian Utilities vs. MCEWEN MINING INC |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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