Correlation Between Rieter Holding and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Rieter Holding and Sulzer AG 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 Rieter Holding and Sulzer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rieter Holding AG and Sulzer AG, you can compare the effects of market volatilities on Rieter Holding and Sulzer AG 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 Rieter Holding with a short position of Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rieter Holding and Sulzer AG.
Diversification Opportunities for Rieter Holding and Sulzer AG
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rieter and Sulzer is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Rieter Holding AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG and Rieter Holding 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 Rieter Holding AG are associated (or correlated) with Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Rieter Holding i.e., Rieter Holding and Sulzer AG go up and down completely randomly.
Pair Corralation between Rieter Holding and Sulzer AG
Assuming the 90 days trading horizon Rieter Holding AG is expected to under-perform the Sulzer AG. But the stock apears to be less risky and, when comparing its historical volatility, Rieter Holding AG is 1.06 times less risky than Sulzer AG. The stock trades about -0.19 of its potential returns per unit of risk. The Sulzer AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 13,340 in Sulzer AG on September 1, 2024 and sell it today you would lose (60.00) from holding Sulzer AG or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rieter Holding AG vs. Sulzer AG
Performance |
| Timeline |
| Rieter Holding AG |
| Sulzer AG |
Rieter Holding and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rieter Holding and Sulzer AG
The main advantage of trading using opposite Rieter Holding and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rieter Holding position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG's long position.| Rieter Holding vs. Autoneum Holding AG | Rieter Holding vs. Sulzer AG | Rieter Holding vs. OC Oerlikon Corp | Rieter Holding vs. Bucher Industries AG |
| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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