Correlation Between Quanex Building and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Quanex Building 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 Quanex Building and Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanex Building Products and Schweiter Technologies AG, you can compare the effects of market volatilities on Quanex Building 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 Quanex Building with a short position of Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanex Building and Schweiter Technologies.
Diversification Opportunities for Quanex Building and Schweiter Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Quanex and Schweiter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quanex Building Products and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Quanex Building 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 Quanex Building Products 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 Quanex Building i.e., Quanex Building and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Quanex Building and Schweiter Technologies
Allowing for the 90-day total investment horizon Quanex Building Products is expected to generate 17.66 times more return on investment than Schweiter Technologies. However, Quanex Building is 17.66 times more volatile than Schweiter Technologies AG. It trades about 0.02 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about 0.0 per unit of risk. If you would invest 2,018 in Quanex Building Products on November 3, 2024 and sell it today you would earn a total of 82.00 from holding Quanex Building Products or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 75.55% |
| Values | Daily Returns |
Quanex Building Products vs. Schweiter Technologies AG
Performance |
| Timeline |
| Quanex Building Products |
| Schweiter Technologies |
Quanex Building and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanex Building and Schweiter Technologies
The main advantage of trading using opposite Quanex Building and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanex Building 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.| Quanex Building vs. Gibraltar Industries | Quanex Building vs. Carpenter Technology | Quanex Building vs. Myers Industries | Quanex Building vs. Griffon |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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