Correlation Between Chocoladefabriken and Swatch Group
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Swatch Group 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 Chocoladefabriken and Swatch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and Swatch Group AG, you can compare the effects of market volatilities on Chocoladefabriken and Swatch Group 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 Chocoladefabriken with a short position of Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Swatch Group.
Diversification Opportunities for Chocoladefabriken and Swatch Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chocoladefabriken and Swatch is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Swatch Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group AG and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group AG has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Swatch Group go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Swatch Group
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.63 times more return on investment than Swatch Group. However, Chocoladefabriken Lindt Spruengli is 1.59 times less risky than Swatch Group. It trades about 0.02 of its potential returns per unit of risk. Swatch Group AG is currently generating about -0.04 per unit of risk. If you would invest 925,382 in Chocoladefabriken Lindt Spruengli on September 12, 2024 and sell it today you would earn a total of 59,118 from holding Chocoladefabriken Lindt Spruengli or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. Swatch Group AG
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Swatch Group AG |
Chocoladefabriken and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Swatch Group
The main advantage of trading using opposite Chocoladefabriken and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group's long position.| Chocoladefabriken vs. Chocoladefabriken Lindt Spruengli | Chocoladefabriken vs. Barry Callebaut AG | Chocoladefabriken vs. SPDR Dow Jones | Chocoladefabriken vs. Baloise Holding AG |
| Swatch Group vs. Compagnie Financire Richemont | Swatch Group vs. Swiss Life Holding | Swatch Group vs. Swisscom AG | Swatch Group vs. Swiss Re 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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