Correlation Between Logitech International and Ams AG
Can any of the company-specific risk be diversified away by investing in both Logitech International and Ams 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 Logitech International and Ams AG 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 Ams AG, you can compare the effects of market volatilities on Logitech International and Ams 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 Logitech International with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Ams AG.
Diversification Opportunities for Logitech International and Ams AG
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Logitech and Ams is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG 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 Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of Logitech International i.e., Logitech International and Ams AG go up and down completely randomly.
Pair Corralation between Logitech International and Ams AG
Assuming the 90 days trading horizon Logitech International SA is expected to generate 0.36 times more return on investment than Ams AG. However, Logitech International SA is 2.76 times less risky than Ams AG. It trades about -0.02 of its potential returns per unit of risk. Ams AG is currently generating about -0.12 per unit of risk. If you would invest 7,838 in Logitech International SA on August 25, 2024 and sell it today you would lose (736.00) from holding Logitech International SA or give up 9.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logitech International SA vs. Ams AG
Performance |
| Timeline |
| Logitech International |
| Ams AG |
Logitech International and Ams AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Ams AG
The main advantage of trading using opposite Logitech International and Ams AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Ams 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 Ams AG will offset losses from the drop in Ams AG'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 |
| Ams AG vs. Logitech International SA | Ams AG vs. Temenos Group AG | Ams AG vs. Swiss Re AG | Ams AG vs. UBS 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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