Correlation Between Logitech International and Adval Tech
Can any of the company-specific risk be diversified away by investing in both Logitech International and Adval Tech 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 Logitech International and Adval Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logitech International SA and Adval Tech Holding, you can compare the effects of market volatilities on Logitech International and Adval Tech 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 Logitech International with a short position of Adval Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Adval Tech.
Diversification Opportunities for Logitech International and Adval Tech
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logitech and Adval is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Adval Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adval Tech Holding and Logitech International 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 Logitech International SA are associated (or correlated) with Adval Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adval Tech Holding has no effect on the direction of Logitech International i.e., Logitech International and Adval Tech go up and down completely randomly.
Pair Corralation between Logitech International and Adval Tech
Assuming the 90 days trading horizon Logitech International SA is expected to generate 0.66 times more return on investment than Adval Tech. However, Logitech International SA is 1.5 times less risky than Adval Tech. It trades about 0.0 of its potential returns per unit of risk. Adval Tech Holding is currently generating about -0.08 per unit of risk. If you would invest 7,423 in Logitech International SA on September 1, 2024 and sell it today you would lose (273.00) from holding Logitech International SA or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.37% |
| Values | Daily Returns |
Logitech International SA vs. Adval Tech Holding
Performance |
| Timeline |
| Logitech International |
| Adval Tech Holding |
Logitech International and Adval Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Adval Tech
The main advantage of trading using opposite Logitech International and Adval Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Adval Tech 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 Adval Tech will offset losses from the drop in Adval Tech's long position.| Logitech International vs. Geberit AG | Logitech International vs. Sika AG | Logitech International vs. Lonza Group AG | Logitech International vs. Swiss Life Holding |
| Adval Tech vs. Feintool International Holding | Adval Tech vs. Also Holding AG | Adval Tech vs. Allreal Holding | Adval Tech vs. Forbo Holding 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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