Correlation Between Logitech International and Swatch Group
Can any of the company-specific risk be diversified away by investing in both Logitech International and Swatch Group 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 Swatch Group 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 Swatch Group AG, you can compare the effects of market volatilities on Logitech International and Swatch Group 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 Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Swatch Group.
Diversification Opportunities for Logitech International and Swatch Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Logitech and Swatch is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Swatch Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group AG has no effect on the direction of Logitech International i.e., Logitech International and Swatch Group go up and down completely randomly.
Pair Corralation between Logitech International and Swatch Group
Assuming the 90 days trading horizon Logitech International SA is expected to generate 1.14 times more return on investment than Swatch Group. However, Logitech International is 1.14 times more volatile than Swatch Group AG. It trades about 0.04 of its potential returns per unit of risk. Swatch Group AG is currently generating about -0.04 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. Swatch Group AG
Performance |
| Timeline |
| Logitech International |
| Swatch Group AG |
Logitech International and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Swatch Group
The main advantage of trading using opposite Logitech International and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group'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 |
| Swatch Group vs. Compagnie Financire Richemont | Swatch Group vs. Swiss Life Holding | Swatch Group vs. Swisscom AG | Swatch Group vs. Swiss Re 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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