Correlation Between Logitech International and Swiss Steel
Can any of the company-specific risk be diversified away by investing in both Logitech International and Swiss Steel 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 Swiss Steel 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 Swiss Steel Holding, you can compare the effects of market volatilities on Logitech International and Swiss Steel 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 Swiss Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Swiss Steel.
Diversification Opportunities for Logitech International and Swiss Steel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logitech and Swiss is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Swiss Steel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Steel 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 Swiss Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Steel Holding has no effect on the direction of Logitech International i.e., Logitech International and Swiss Steel go up and down completely randomly.
Pair Corralation between Logitech International and Swiss Steel
Assuming the 90 days trading horizon Logitech International SA is expected to generate 0.42 times more return on investment than Swiss Steel. However, Logitech International SA is 2.4 times less risky than Swiss Steel. It trades about 0.0 of its potential returns per unit of risk. Swiss Steel Holding is currently generating about -0.29 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 | 100.0% |
| Values | Daily Returns |
Logitech International SA vs. Swiss Steel Holding
Performance |
| Timeline |
| Logitech International |
| Swiss Steel Holding |
Logitech International and Swiss Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Swiss Steel
The main advantage of trading using opposite Logitech International and Swiss Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Swiss Steel 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 Swiss Steel will offset losses from the drop in Swiss Steel'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 |
| Swiss Steel vs. OC Oerlikon Corp | Swiss Steel vs. Meyer Burger Tech | Swiss Steel vs. Evolva Holding SA | Swiss Steel vs. Sulzer 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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