Correlation Between Schweiter Technologies and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Schweiter Technologies and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Ecclesiastical Insurance.
Diversification Opportunities for Schweiter Technologies and Ecclesiastical Insurance
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schweiter and Ecclesiastical is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Schweiter Technologies and Ecclesiastical Insurance
Assuming the 90 days trading horizon Schweiter Technologies AG is expected to under-perform the Ecclesiastical Insurance. In addition to that, Schweiter Technologies is 1.37 times more volatile than Ecclesiastical Insurance Office. It trades about -0.03 of its total potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.11 per unit of volatility. If you would invest 13,200 in Ecclesiastical Insurance Office on November 29, 2024 and sell it today you would earn a total of 400.00 from holding Ecclesiastical Insurance Office or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweiter Technologies AG vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Schweiter Technologies |
| Ecclesiastical Insurance |
Schweiter Technologies and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweiter Technologies and Ecclesiastical Insurance
The main advantage of trading using opposite Schweiter Technologies and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweiter Technologies position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.The idea behind Schweiter Technologies AG and Ecclesiastical Insurance Office 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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