Correlation Between Schweiter Technologies and Burford Capital
Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Burford Capital 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 Burford Capital 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 Burford Capital Limited, you can compare the effects of market volatilities on Schweiter Technologies and Burford Capital 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 Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Burford Capital.
Diversification Opportunities for Schweiter Technologies and Burford Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schweiter and Burford is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Burford Capital Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital 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 Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Burford Capital go up and down completely randomly.
Pair Corralation between Schweiter Technologies and Burford Capital
Assuming the 90 days trading horizon Schweiter Technologies AG is expected to generate 1.75 times more return on investment than Burford Capital. However, Schweiter Technologies is 1.75 times more volatile than Burford Capital Limited. It trades about 0.03 of its potential returns per unit of risk. Burford Capital Limited is currently generating about 0.0 per unit of risk. If you would invest 40,800 in Schweiter Technologies AG on August 31, 2024 and sell it today you would earn a total of 400.00 from holding Schweiter Technologies AG or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Schweiter Technologies AG vs. Burford Capital Limited
Performance |
| Timeline |
| Schweiter Technologies |
| Burford Capital |
Schweiter Technologies and Burford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweiter Technologies and Burford Capital
The main advantage of trading using opposite Schweiter Technologies and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweiter Technologies position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.| Schweiter Technologies vs. Neometals | Schweiter Technologies vs. Coor Service Management | Schweiter Technologies vs. Aeorema Communications Plc | Schweiter Technologies vs. JLEN Environmental Assets |
| Burford Capital vs. Concurrent Technologies Plc | Burford Capital vs. Empire Metals Limited | Burford Capital vs. Roper Technologies | Burford Capital vs. Schweiter Technologies AG |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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