Correlation Between Schweiter Technologies and Thales
Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Thales 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 Schweiter Technologies and Thales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweiter Technologies AG and Thales, you can compare the effects of market volatilities on Schweiter Technologies and Thales 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 Schweiter Technologies with a short position of Thales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Thales.
Diversification Opportunities for Schweiter Technologies and Thales
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schweiter and Thales is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Thales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales and Schweiter Technologies 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 Schweiter Technologies AG are associated (or correlated) with Thales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Thales go up and down completely randomly.
Pair Corralation between Schweiter Technologies and Thales
Assuming the 90 days trading horizon Schweiter Technologies AG is expected to under-perform the Thales. In addition to that, Schweiter Technologies is 1.27 times more volatile than Thales. It trades about -0.06 of its total potential returns per unit of risk. Thales is currently generating about 0.03 per unit of volatility. If you would invest 11,693 in Thales on September 2, 2024 and sell it today you would earn a total of 2,464 from holding Thales or generate 21.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Schweiter Technologies AG vs. Thales
Performance |
| Timeline |
| Schweiter Technologies |
| Thales |
Schweiter Technologies and Thales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweiter Technologies and Thales
The main advantage of trading using opposite Schweiter Technologies and Thales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweiter Technologies position performs unexpectedly, Thales 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 Thales will offset losses from the drop in Thales' long position.| Schweiter Technologies vs. Charter Communications Cl | Schweiter Technologies vs. Naturhouse Health SA | Schweiter Technologies vs. Aeorema Communications Plc | Schweiter Technologies vs. Abingdon Health Plc |
| Thales vs. Cizzle Biotechnology Holdings | Thales vs. Fevertree Drinks Plc | Thales vs. JLEN Environmental Assets | Thales vs. Batm Advanced Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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