Correlation Between Straumann Holding and Shandong Weigao
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Shandong Weigao 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 Straumann Holding and Shandong Weigao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Shandong Weigao Group, you can compare the effects of market volatilities on Straumann Holding and Shandong Weigao 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 Straumann Holding with a short position of Shandong Weigao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Shandong Weigao.
Diversification Opportunities for Straumann Holding and Shandong Weigao
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Straumann and Shandong is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Shandong Weigao Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Weigao Group and Straumann 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 Straumann Holding AG are associated (or correlated) with Shandong Weigao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Weigao Group has no effect on the direction of Straumann Holding i.e., Straumann Holding and Shandong Weigao go up and down completely randomly.
Pair Corralation between Straumann Holding and Shandong Weigao
Assuming the 90 days horizon Straumann Holding is expected to generate 2.83 times less return on investment than Shandong Weigao. But when comparing it to its historical volatility, Straumann Holding AG is 2.35 times less risky than Shandong Weigao. It trades about 0.01 of its potential returns per unit of risk. Shandong Weigao Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 262.00 in Shandong Weigao Group on September 3, 2024 and sell it today you would lose (26.00) from holding Shandong Weigao Group or give up 9.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Straumann Holding AG vs. Shandong Weigao Group
Performance |
| Timeline |
| Straumann Holding |
| Shandong Weigao Group |
Straumann Holding and Shandong Weigao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Shandong Weigao
The main advantage of trading using opposite Straumann Holding and Shandong Weigao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Shandong Weigao 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 Shandong Weigao will offset losses from the drop in Shandong Weigao's long position.| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA | Straumann Holding vs. EssilorLuxottica Socit anonyme |
| Shandong Weigao vs. Ansell Limited | Shandong Weigao vs. Straumann Holding AG | Shandong Weigao vs. Utah Medical Products | Shandong Weigao vs. AngioDynamics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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