Correlation Between Logitech International and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Logitech International and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Logitech International and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Chocoladefabriken.
Diversification Opportunities for Logitech International and Chocoladefabriken
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Logitech and Chocoladefabriken is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Logitech International i.e., Logitech International and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Logitech International and Chocoladefabriken
Assuming the 90 days trading horizon Logitech International SA is expected to generate 1.81 times more return on investment than Chocoladefabriken. However, Logitech International is 1.81 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.04 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.02 per unit of risk. If you would invest 5,500 in Logitech International SA on September 12, 2024 and sell it today you would earn a total of 1,938 from holding Logitech International SA or generate 35.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logitech International SA vs. Chocoladefabriken Lindt Spruen
Performance |
| Timeline |
| Logitech International |
| Chocoladefabriken Lindt |
Logitech International and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Chocoladefabriken
The main advantage of trading using opposite Logitech International and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken'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 |
| Chocoladefabriken vs. Chocoladefabriken Lindt Spruengli | Chocoladefabriken vs. Barry Callebaut AG | Chocoladefabriken vs. SPDR Dow Jones | Chocoladefabriken vs. Baloise 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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