Correlation Between Miton UK and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Miton UK and Schweiter Technologies 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 Miton UK and Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miton UK MicroCap and Schweiter Technologies AG, you can compare the effects of market volatilities on Miton UK and Schweiter Technologies 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 Miton UK with a short position of Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miton UK and Schweiter Technologies.
Diversification Opportunities for Miton UK and Schweiter Technologies
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Miton and Schweiter is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Miton UK MicroCap and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Miton UK 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 Miton UK MicroCap are associated (or correlated) with Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Miton UK i.e., Miton UK and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Miton UK and Schweiter Technologies
Assuming the 90 days trading horizon Miton UK MicroCap is expected to generate 0.32 times more return on investment than Schweiter Technologies. However, Miton UK MicroCap is 3.15 times less risky than Schweiter Technologies. It trades about 0.07 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.01 per unit of risk. If you would invest 4,510 in Miton UK MicroCap on November 28, 2024 and sell it today you would earn a total of 40.00 from holding Miton UK MicroCap or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miton UK MicroCap vs. Schweiter Technologies AG
Performance |
| Timeline |
| Miton UK MicroCap |
| Schweiter Technologies |
Miton UK and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miton UK and Schweiter Technologies
The main advantage of trading using opposite Miton UK and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miton UK position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Miton UK vs. Nordic Semiconductor ASA | Miton UK vs. Resolute Mining Limited | Miton UK vs. Fortuna Silver Mines | Miton UK vs. Beowulf Mining |
| Schweiter Technologies vs. Naked Wines plc | Schweiter Technologies vs. Synthomer plc | Schweiter Technologies vs. Zegona Communications Plc | Schweiter Technologies vs. Bigblu Broadband PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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