Correlation Between New Germany and Swiss Helvetia
Can any of the company-specific risk be diversified away by investing in both New Germany and Swiss Helvetia 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 New Germany and Swiss Helvetia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Germany Closed and Swiss Helvetia Closed, you can compare the effects of market volatilities on New Germany and Swiss Helvetia 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 New Germany with a short position of Swiss Helvetia. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Germany and Swiss Helvetia.
Diversification Opportunities for New Germany and Swiss Helvetia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Swiss is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding New Germany Closed and Swiss Helvetia Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Helvetia Closed and New Germany 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 New Germany Closed are associated (or correlated) with Swiss Helvetia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Helvetia Closed has no effect on the direction of New Germany i.e., New Germany and Swiss Helvetia go up and down completely randomly.
Pair Corralation between New Germany and Swiss Helvetia
Allowing for the 90-day total investment horizon New Germany Closed is expected to under-perform the Swiss Helvetia. But the fund apears to be less risky and, when comparing its historical volatility, New Germany Closed is 1.12 times less risky than Swiss Helvetia. The fund trades about -0.06 of its potential returns per unit of risk. The Swiss Helvetia Closed is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 873.00 in Swiss Helvetia Closed on November 1, 2024 and sell it today you would lose (6.00) from holding Swiss Helvetia Closed or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Germany Closed vs. Swiss Helvetia Closed
Performance |
| Timeline |
| New Germany Closed |
| Swiss Helvetia Closed |
New Germany and Swiss Helvetia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Germany and Swiss Helvetia
The main advantage of trading using opposite New Germany and Swiss Helvetia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Germany position performs unexpectedly, Swiss Helvetia 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 Helvetia will offset losses from the drop in Swiss Helvetia's long position.| New Germany vs. Eagle Point Income | New Germany vs. Western Asset High | New Germany vs. Nuveen New York | New Germany vs. Western Asset High |
| Swiss Helvetia vs. MFS High Yield | Swiss Helvetia vs. MFS High Income | Swiss Helvetia vs. MFS Multimarket Income | Swiss Helvetia vs. MFS Intermediate Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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