Correlation Between SWISS WATER and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and Woolworths Group 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 Woolworths Group 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 Woolworths Group Limited, you can compare the effects of market volatilities on SWISS WATER and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Woolworths Group.
Diversification Opportunities for SWISS WATER and Woolworths Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SWISS and Woolworths is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of SWISS WATER i.e., SWISS WATER and Woolworths Group go up and down completely randomly.
Pair Corralation between SWISS WATER and Woolworths Group
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the Woolworths Group. In addition to that, SWISS WATER is 2.35 times more volatile than Woolworths Group Limited. It trades about -0.09 of its total potential returns per unit of risk. Woolworths Group Limited is currently generating about 0.06 per unit of volatility. If you would invest 1,810 in Woolworths Group Limited on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Woolworths Group Limited or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Woolworths Group Limited
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Woolworths Group |
SWISS WATER and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Woolworths Group
The main advantage of trading using opposite SWISS WATER and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| SWISS WATER vs. Japan Post Insurance | SWISS WATER vs. CAL MAINE FOODS | SWISS WATER vs. REVO INSURANCE SPA | SWISS WATER vs. JJ SNACK FOODS |
| Woolworths Group vs. Loblaw Companies Limited | Woolworths Group vs. Superior Plus Corp | Woolworths Group vs. SIVERS SEMICONDUCTORS AB | Woolworths Group vs. Norsk Hydro ASA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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