Correlation Between SWISS WATER and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on SWISS WATER and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and DATAGROUP.
Diversification Opportunities for SWISS WATER and DATAGROUP
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SWISS and DATAGROUP is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of SWISS WATER i.e., SWISS WATER and DATAGROUP go up and down completely randomly.
Pair Corralation between SWISS WATER and DATAGROUP
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the DATAGROUP. But the stock apears to be less risky and, when comparing its historical volatility, SWISS WATER DECAFFCOFFEE is 1.21 times less risky than DATAGROUP. The stock trades about -0.12 of its potential returns per unit of risk. The DATAGROUP SE is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,275 in DATAGROUP SE on November 28, 2024 and sell it today you would lose (130.00) from holding DATAGROUP SE or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. DATAGROUP SE
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| DATAGROUP SE |
SWISS WATER and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and DATAGROUP
The main advantage of trading using opposite SWISS WATER and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| SWISS WATER vs. MOVIE GAMES SA | SWISS WATER vs. Mitsui Chemicals | SWISS WATER vs. QINGCI GAMES INC | SWISS WATER vs. OURGAME INTHOLDL 00005 |
| DATAGROUP vs. SALESFORCE INC CDR | DATAGROUP vs. MARKET VECTR RETAIL | DATAGROUP vs. TITAN MACHINERY | DATAGROUP vs. FLOW TRADERS LTD |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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