Correlation Between USWE Sports and Real Heart

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

Diversification Opportunities for USWE Sports and Real Heart

-0.64

Correlation Coefficient

USWE Sports  Real Heart

Excellent diversification

The 3 months correlation between USWE and Real is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports AB and Real Heart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Heart 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 Real Heart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Heart has no effect on the direction of USWE Sports i.e., USWE Sports and Real Heart go up and down completely randomly.

Pair Corralation between USWE Sports and Real Heart

Assuming the 90 days trading horizon USWE Sports AB is expected to generate 1.05 times more return on investment than Real Heart. However, USWE Sports is 1.05 times more volatile than Real Heart. It trades about 0.31 of its potential returns per unit of risk. Real Heart is currently generating about 0.0 per unit of risk. If you would invest  740.00  in USWE Sports AB on April 24, 2025 and sell it today you would earn a total of  660.00  from holding USWE Sports AB or generate 89.19% return on investment over 90 days.

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

USWE Sports AB  vs.  Real Heart

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 24 (%) of all global equities and portfolios over the last 90 days. 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.

Real Heart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Heart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Real Heart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with USWE Sports and Real Heart

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

The idea behind USWE Sports AB and Real Heart 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.