Correlation Between Schweizer Electronic and Microsoft
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Schweizer Electronic and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and Microsoft.
Diversification Opportunities for Schweizer Electronic and Microsoft
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schweizer and Microsoft is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Schweizer Electronic i.e., Schweizer Electronic and Microsoft go up and down completely randomly.
Pair Corralation between Schweizer Electronic and Microsoft
Assuming the 90 days horizon Schweizer Electronic is expected to generate 1.15 times less return on investment than Microsoft. In addition to that, Schweizer Electronic is 4.37 times more volatile than Microsoft. It trades about 0.04 of its total potential returns per unit of risk. Microsoft is currently generating about 0.19 per unit of volatility. If you would invest 39,870 in Microsoft on September 27, 2024 and sell it today you would earn a total of 1,830 from holding Microsoft or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizer Electronic AG vs. Microsoft
Performance |
| Timeline |
| Schweizer Electronic |
| Microsoft |
Schweizer Electronic and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizer Electronic and Microsoft
The main advantage of trading using opposite Schweizer Electronic and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Schweizer Electronic vs. Jabil Inc | Schweizer Electronic vs. Ibiden CoLtd | Schweizer Electronic vs. Plexus Corp | Schweizer Electronic vs. KCE EL PCL |
| Microsoft vs. ELECTRONIC ARTS | Microsoft vs. Schweizer Electronic AG | Microsoft vs. GAMESTOP | Microsoft vs. KIMBALL ELECTRONICS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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