Correlation Between Schweizer Electronic and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic and Dow Jones 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 Schweizer Electronic and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizer Electronic AG and Dow Jones Industrial, you can compare the effects of market volatilities on Schweizer Electronic and Dow Jones 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 Schweizer Electronic with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and Dow Jones.
Diversification Opportunities for Schweizer Electronic and Dow Jones
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schweizer and Dow is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Schweizer Electronic 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 Schweizer Electronic AG are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Schweizer Electronic i.e., Schweizer Electronic and Dow Jones go up and down completely randomly.
Pair Corralation between Schweizer Electronic and Dow Jones
Assuming the 90 days horizon Schweizer Electronic AG is expected to under-perform the Dow Jones. In addition to that, Schweizer Electronic is 9.67 times more volatile than Dow Jones Industrial. It trades about -0.16 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of volatility. If you would invest 4,395,819 in Dow Jones Industrial on September 14, 2024 and sell it today you would lose (4,407) from holding Dow Jones Industrial or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Schweizer Electronic AG vs. Dow Jones Industrial
Performance |
| Timeline |
Schweizer Electronic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Schweizer Electronic AG
Pair trading matchups for Schweizer Electronic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Schweizer Electronic and Dow Jones
The main advantage of trading using opposite Schweizer Electronic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Schweizer Electronic vs. Benchmark Electronics | Schweizer Electronic vs. Superior Plus Corp | Schweizer Electronic vs. SIVERS SEMICONDUCTORS AB | Schweizer Electronic vs. Norsk Hydro ASA |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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