Correlation Between Schweizer Electronic and National Health
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on Schweizer Electronic and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and National Health.
Diversification Opportunities for Schweizer Electronic and National Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schweizer and National is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Schweizer Electronic i.e., Schweizer Electronic and National Health go up and down completely randomly.
Pair Corralation between Schweizer Electronic and National Health
Assuming the 90 days horizon Schweizer Electronic AG is expected to under-perform the National Health. In addition to that, Schweizer Electronic is 5.68 times more volatile than National Health Investors. It trades about -0.19 of its total potential returns per unit of risk. National Health Investors is currently generating about -0.51 per unit of volatility. If you would invest 7,350 in National Health Investors on September 22, 2024 and sell it today you would lose (750.00) from holding National Health Investors or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizer Electronic AG vs. National Health Investors
Performance |
| Timeline |
| Schweizer Electronic |
| National Health Investors |
Schweizer Electronic and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizer Electronic and National Health
The main advantage of trading using opposite Schweizer Electronic and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Schweizer Electronic vs. Jabil Inc | Schweizer Electronic vs. Ibiden CoLtd | Schweizer Electronic vs. Plexus Corp | Schweizer Electronic vs. KCE EL PCL |
| National Health vs. Schweizer Electronic AG | National Health vs. SIDETRADE EO 1 | National Health vs. ARROW ELECTRONICS | National Health vs. American Eagle Outfitters |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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