Correlation Between Schindler Holding and Swisscom
Can any of the company-specific risk be diversified away by investing in both Schindler Holding and Swisscom 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 Schindler Holding and Swisscom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schindler Holding AG and Swisscom AG, you can compare the effects of market volatilities on Schindler Holding and Swisscom 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 Schindler Holding with a short position of Swisscom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schindler Holding and Swisscom.
Diversification Opportunities for Schindler Holding and Swisscom
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schindler and Swisscom is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Schindler Holding AG and Swisscom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swisscom AG and Schindler 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 Schindler Holding AG are associated (or correlated) with Swisscom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swisscom AG has no effect on the direction of Schindler Holding i.e., Schindler Holding and Swisscom go up and down completely randomly.
Pair Corralation between Schindler Holding and Swisscom
Assuming the 90 days trading horizon Schindler Holding AG is expected to generate 1.52 times more return on investment than Swisscom. However, Schindler Holding is 1.52 times more volatile than Swisscom AG. It trades about 0.03 of its potential returns per unit of risk. Swisscom AG is currently generating about -0.25 per unit of risk. If you would invest 25,150 in Schindler Holding AG on September 12, 2024 and sell it today you would earn a total of 150.00 from holding Schindler Holding AG or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schindler Holding AG vs. Swisscom AG
Performance |
| Timeline |
| Schindler Holding |
| Swisscom AG |
Schindler Holding and Swisscom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schindler Holding and Swisscom
The main advantage of trading using opposite Schindler Holding and Swisscom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schindler Holding position performs unexpectedly, Swisscom 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 Swisscom will offset losses from the drop in Swisscom's long position.| Schindler Holding vs. Geberit AG | Schindler Holding vs. Givaudan SA | Schindler Holding vs. SGS SA | Schindler Holding vs. Straumann Holding AG |
| Swisscom vs. Swiss Life Holding | Swisscom vs. Zurich Insurance Group | Swisscom vs. Swiss Re AG | Swisscom vs. ABB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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