Correlation Between Adval Tech and Swiss Steel
Can any of the company-specific risk be diversified away by investing in both Adval Tech and Swiss Steel 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 Adval Tech and Swiss Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adval Tech Holding and Swiss Steel Holding, you can compare the effects of market volatilities on Adval Tech and Swiss Steel 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 Adval Tech with a short position of Swiss Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adval Tech and Swiss Steel.
Diversification Opportunities for Adval Tech and Swiss Steel
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Adval and Swiss is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Adval Tech Holding and Swiss Steel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Steel Holding and Adval Tech 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 Adval Tech Holding are associated (or correlated) with Swiss Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Steel Holding has no effect on the direction of Adval Tech i.e., Adval Tech and Swiss Steel go up and down completely randomly.
Pair Corralation between Adval Tech and Swiss Steel
Assuming the 90 days trading horizon Adval Tech Holding is expected to generate 0.63 times more return on investment than Swiss Steel. However, Adval Tech Holding is 1.6 times less risky than Swiss Steel. It trades about -0.08 of its potential returns per unit of risk. Swiss Steel Holding is currently generating about -0.29 per unit of risk. If you would invest 9,850 in Adval Tech Holding on September 1, 2024 and sell it today you would lose (2,700) from holding Adval Tech Holding or give up 27.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 70.37% |
| Values | Daily Returns |
Adval Tech Holding vs. Swiss Steel Holding
Performance |
| Timeline |
| Adval Tech Holding |
| Swiss Steel Holding |
Adval Tech and Swiss Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adval Tech and Swiss Steel
The main advantage of trading using opposite Adval Tech and Swiss Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adval Tech position performs unexpectedly, Swiss Steel 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 Swiss Steel will offset losses from the drop in Swiss Steel's long position.| Adval Tech vs. Feintool International Holding | Adval Tech vs. Also Holding AG | Adval Tech vs. Allreal Holding | Adval Tech vs. Forbo Holding AG |
| Swiss Steel vs. OC Oerlikon Corp | Swiss Steel vs. Meyer Burger Tech | Swiss Steel vs. Evolva Holding SA | Swiss Steel vs. Sulzer 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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