Correlation Between Logitech International and BVZ Holding
Can any of the company-specific risk be diversified away by investing in both Logitech International and BVZ Holding 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 BVZ Holding 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 BVZ Holding AG, you can compare the effects of market volatilities on Logitech International and BVZ Holding 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 BVZ Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and BVZ Holding.
Diversification Opportunities for Logitech International and BVZ Holding
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Logitech and BVZ is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and BVZ Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BVZ Holding 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 BVZ Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BVZ Holding AG has no effect on the direction of Logitech International i.e., Logitech International and BVZ Holding go up and down completely randomly.
Pair Corralation between Logitech International and BVZ Holding
Assuming the 90 days trading horizon Logitech International SA is expected to generate 1.36 times more return on investment than BVZ Holding. However, Logitech International is 1.36 times more volatile than BVZ Holding AG. It trades about 0.17 of its potential returns per unit of risk. BVZ Holding AG is currently generating about -0.17 per unit of risk. If you would invest 7,090 in Logitech International SA on September 8, 2024 and sell it today you would earn a total of 394.00 from holding Logitech International SA or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Logitech International SA vs. BVZ Holding AG
Performance |
| Timeline |
| Logitech International |
| BVZ Holding AG |
Logitech International and BVZ Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and BVZ Holding
The main advantage of trading using opposite Logitech International and BVZ Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, BVZ Holding 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 BVZ Holding will offset losses from the drop in BVZ Holding'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 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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