Correlation Between Dover and Schindler Holding
Can any of the company-specific risk be diversified away by investing in both Dover and Schindler Holding 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 Dover and Schindler Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dover and Schindler Holding AG, you can compare the effects of market volatilities on Dover and Schindler Holding 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 Dover with a short position of Schindler Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dover and Schindler Holding.
Diversification Opportunities for Dover and Schindler Holding
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dover and Schindler is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dover and Schindler Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Holding and Dover 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 Dover are associated (or correlated) with Schindler Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Holding has no effect on the direction of Dover i.e., Dover and Schindler Holding go up and down completely randomly.
Pair Corralation between Dover and Schindler Holding
Considering the 90-day investment horizon Dover is expected to generate 0.84 times more return on investment than Schindler Holding. However, Dover is 1.19 times less risky than Schindler Holding. It trades about 0.13 of its potential returns per unit of risk. Schindler Holding AG is currently generating about -0.04 per unit of risk. If you would invest 19,174 in Dover on August 30, 2024 and sell it today you would earn a total of 1,477 from holding Dover or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dover vs. Schindler Holding AG
Performance |
| Timeline |
| Dover |
| Schindler Holding |
Dover and Schindler Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dover and Schindler Holding
The main advantage of trading using opposite Dover and Schindler Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dover position performs unexpectedly, Schindler Holding 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 Schindler Holding will offset losses from the drop in Schindler Holding's long position.The idea behind Dover and Schindler Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Schindler Holding vs. Rockwell Automation | Schindler Holding vs. Parker Hannifin | Schindler Holding vs. Ingersoll Rand | Schindler Holding vs. Dover |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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