Correlation Between KERINGUNSPADR 110 and Swatch
Can any of the company-specific risk be diversified away by investing in both KERINGUNSPADR 110 and Swatch 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 KERINGUNSPADR 110 and Swatch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KERINGUNSPADR 110 EO and The Swatch Group, you can compare the effects of market volatilities on KERINGUNSPADR 110 and Swatch 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 KERINGUNSPADR 110 with a short position of Swatch. Check out your portfolio center. Please also check ongoing floating volatility patterns of KERINGUNSPADR 110 and Swatch.
Diversification Opportunities for KERINGUNSPADR 110 and Swatch
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KERINGUNSPADR and Swatch is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KERINGUNSPADR 110 EO and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group and KERINGUNSPADR 110 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 KERINGUNSPADR 110 EO are associated (or correlated) with Swatch. 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 has no effect on the direction of KERINGUNSPADR 110 i.e., KERINGUNSPADR 110 and Swatch go up and down completely randomly.
Pair Corralation between KERINGUNSPADR 110 and Swatch
Assuming the 90 days trading horizon KERINGUNSPADR 110 EO is expected to under-perform the Swatch. But the stock apears to be less risky and, when comparing its historical volatility, KERINGUNSPADR 110 EO is 1.15 times less risky than Swatch. The stock trades about -0.08 of its potential returns per unit of risk. The The Swatch Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 945.00 in The Swatch Group on September 26, 2024 and sell it today you would lose (130.00) from holding The Swatch Group or give up 13.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KERINGUNSPADR 110 EO vs. The Swatch Group
Performance |
| Timeline |
| KERINGUNSPADR 110 |
| Swatch Group |
KERINGUNSPADR 110 and Swatch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KERINGUNSPADR 110 and Swatch
The main advantage of trading using opposite KERINGUNSPADR 110 and Swatch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KERINGUNSPADR 110 position performs unexpectedly, Swatch 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 will offset losses from the drop in Swatch's long position.| KERINGUNSPADR 110 vs. LVMH Mot Hennessy | KERINGUNSPADR 110 vs. Herms International Socit | KERINGUNSPADR 110 vs. CHRISTIAN DIOR ADR14EO2 | KERINGUNSPADR 110 vs. Christian Dior SE |
| Swatch vs. LVMH Mot Hennessy | Swatch vs. Herms International Socit | Swatch vs. CHRISTIAN DIOR ADR14EO2 | Swatch vs. Christian Dior SE |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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