Correlation Between Implenia and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Implenia and Sulzer AG 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 Implenia and Sulzer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Implenia AG and Sulzer AG, you can compare the effects of market volatilities on Implenia and Sulzer AG 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 Implenia with a short position of Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Sulzer AG.
Diversification Opportunities for Implenia and Sulzer AG
Very weak diversification
The 3 months correlation between Implenia and Sulzer is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG and Implenia 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 Implenia AG are associated (or correlated) with Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Implenia i.e., Implenia and Sulzer AG go up and down completely randomly.
Pair Corralation between Implenia and Sulzer AG
Assuming the 90 days trading horizon Implenia AG is expected to under-perform the Sulzer AG. In addition to that, Implenia is 1.09 times more volatile than Sulzer AG. It trades about -0.12 of its total potential returns per unit of risk. Sulzer AG is currently generating about -0.01 per unit of volatility. If you would invest 13,340 in Sulzer AG on September 1, 2024 and sell it today you would lose (60.00) from holding Sulzer AG or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Implenia AG vs. Sulzer AG
Performance |
| Timeline |
| Implenia AG |
| Sulzer AG |
Implenia and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Implenia and Sulzer AG
The main advantage of trading using opposite Implenia and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG's long position.| Implenia vs. Helvetia Holding AG | Implenia vs. Bucher Industries AG | Implenia vs. Hubersuhner AG | Implenia vs. Stadler Rail AG |
| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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