Correlation Between Mulberry Group and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Schweiter Technologies AG, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Schweiter Technologies.
Diversification Opportunities for Mulberry Group and Schweiter Technologies
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mulberry and Schweiter is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Mulberry Group and Schweiter Technologies
Assuming the 90 days trading horizon Mulberry Group PLC is expected to generate 2.04 times more return on investment than Schweiter Technologies. However, Mulberry Group is 2.04 times more volatile than Schweiter Technologies AG. It trades about 0.13 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.07 per unit of risk. If you would invest 10,000 in Mulberry Group PLC on September 25, 2024 and sell it today you would earn a total of 700.00 from holding Mulberry Group PLC or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Schweiter Technologies AG
Performance |
| Timeline |
| Mulberry Group PLC |
| Schweiter Technologies |
Mulberry Group and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Schweiter Technologies
The main advantage of trading using opposite Mulberry Group and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Rightmove PLC | Mulberry Group vs. Bioventix | Mulberry Group vs. VeriSign | Mulberry Group vs. Games Workshop Group |
| Schweiter Technologies vs. Uniper SE | Schweiter Technologies vs. Mulberry Group PLC | Schweiter Technologies vs. London Security Plc | Schweiter Technologies vs. Triad Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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