Correlation Between Schweizer Electronic and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on Schweizer Electronic and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and STORE ELECTRONIC.
Diversification Opportunities for Schweizer Electronic and STORE ELECTRONIC
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Schweizer and STORE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Schweizer Electronic i.e., Schweizer Electronic and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Schweizer Electronic and STORE ELECTRONIC
Assuming the 90 days horizon Schweizer Electronic AG is expected to under-perform the STORE ELECTRONIC. But the stock apears to be less risky and, when comparing its historical volatility, Schweizer Electronic AG is 1.06 times less risky than STORE ELECTRONIC. The stock trades about -0.03 of its potential returns per unit of risk. The STORE ELECTRONIC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 15,210 in STORE ELECTRONIC on October 21, 2024 and sell it today you would earn a total of 1,280 from holding STORE ELECTRONIC or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizer Electronic AG vs. STORE ELECTRONIC
Performance |
| Timeline |
| Schweizer Electronic |
| STORE ELECTRONIC |
Schweizer Electronic and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizer Electronic and STORE ELECTRONIC
The main advantage of trading using opposite Schweizer Electronic and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Schweizer Electronic vs. KINGBOARD CHEMICAL | Schweizer Electronic vs. Renesas Electronics | Schweizer Electronic vs. SEKISUI CHEMICAL | Schweizer Electronic vs. Silicon Motion Technology |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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