Correlation Between Addtech AB and Schweizer Electronic
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Schweizer Electronic 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 Addtech AB and Schweizer Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Schweizer Electronic AG, you can compare the effects of market volatilities on Addtech AB and Schweizer Electronic 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 Addtech AB with a short position of Schweizer Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Schweizer Electronic.
Diversification Opportunities for Addtech AB and Schweizer Electronic
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addtech and Schweizer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Schweizer Electronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizer Electronic and Addtech AB 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 Addtech AB are associated (or correlated) with Schweizer Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizer Electronic has no effect on the direction of Addtech AB i.e., Addtech AB and Schweizer Electronic go up and down completely randomly.
Pair Corralation between Addtech AB and Schweizer Electronic
Assuming the 90 days trading horizon Addtech AB is expected to under-perform the Schweizer Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Addtech AB is 2.4 times less risky than Schweizer Electronic. The stock trades about -0.27 of its potential returns per unit of risk. The Schweizer Electronic AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 244.00 in Schweizer Electronic AG on October 17, 2024 and sell it today you would lose (8.00) from holding Schweizer Electronic AG or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Schweizer Electronic AG
Performance |
| Timeline |
| Addtech AB |
| Schweizer Electronic |
Addtech AB and Schweizer Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Schweizer Electronic
The main advantage of trading using opposite Addtech AB and Schweizer Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Schweizer Electronic 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 Schweizer Electronic will offset losses from the drop in Schweizer Electronic's long position.| Addtech AB vs. COREBRIDGE FINANCIAL INC | Addtech AB vs. ScanSource | Addtech AB vs. Highlight Communications AG | Addtech AB vs. Rocket Internet SE |
| Schweizer Electronic vs. THORNEY TECHS LTD | Schweizer Electronic vs. ScanSource | Schweizer Electronic vs. Bio Techne Corp | Schweizer Electronic vs. Addtech AB |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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