Correlation Between SWISS WATER and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and WIMFARM SA 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 SWISS WATER and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and WIMFARM SA EO, you can compare the effects of market volatilities on SWISS WATER and WIMFARM SA 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 SWISS WATER with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and WIMFARM SA.
Diversification Opportunities for SWISS WATER and WIMFARM SA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SWISS and WIMFARM is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and SWISS WATER 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 SWISS WATER DECAFFCOFFEE are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of SWISS WATER i.e., SWISS WATER and WIMFARM SA go up and down completely randomly.
Pair Corralation between SWISS WATER and WIMFARM SA
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 0.71 times more return on investment than WIMFARM SA. However, SWISS WATER DECAFFCOFFEE is 1.41 times less risky than WIMFARM SA. It trades about 0.14 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.18 per unit of risk. If you would invest 236.00 in SWISS WATER DECAFFCOFFEE on September 3, 2024 and sell it today you would earn a total of 36.00 from holding SWISS WATER DECAFFCOFFEE or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. WIMFARM SA EO
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| WIMFARM SA EO |
SWISS WATER and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and WIMFARM SA
The main advantage of trading using opposite SWISS WATER and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| SWISS WATER vs. Nestl SA | SWISS WATER vs. Kraft Heinz Co | SWISS WATER vs. General Mills | SWISS WATER vs. Kellogg Company |
| WIMFARM SA vs. SALESFORCE INC CDR | WIMFARM SA vs. EHEALTH | WIMFARM SA vs. YATRA ONLINE DL 0001 | WIMFARM SA vs. SWISS WATER DECAFFCOFFEE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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