Correlation Between Swisscom and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Swisscom and Chocoladefabriken 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 Swisscom and Chocoladefabriken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swisscom AG and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Swisscom and Chocoladefabriken 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 Swisscom with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swisscom and Chocoladefabriken.
Diversification Opportunities for Swisscom and Chocoladefabriken
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swisscom and Chocoladefabriken is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Swisscom AG and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Swisscom 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 Swisscom AG are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Swisscom i.e., Swisscom and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Swisscom and Chocoladefabriken
Assuming the 90 days trading horizon Swisscom is expected to generate 1.01 times less return on investment than Chocoladefabriken. But when comparing it to its historical volatility, Swisscom AG is 1.32 times less risky than Chocoladefabriken. It trades about 0.02 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 925,382 in Chocoladefabriken Lindt Spruengli on September 12, 2024 and sell it today you would earn a total of 59,118 from holding Chocoladefabriken Lindt Spruengli or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swisscom AG vs. Chocoladefabriken Lindt Spruen
Performance |
| Timeline |
| Swisscom AG |
| Chocoladefabriken Lindt |
Swisscom and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swisscom and Chocoladefabriken
The main advantage of trading using opposite Swisscom and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swisscom position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.| Swisscom vs. Swiss Life Holding | Swisscom vs. Zurich Insurance Group | Swisscom vs. Swiss Re AG | Swisscom vs. ABB |
| Chocoladefabriken vs. Chocoladefabriken Lindt Spruengli | Chocoladefabriken vs. Barry Callebaut AG | Chocoladefabriken vs. SPDR Dow Jones | Chocoladefabriken vs. Baloise Holding AG |
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 CEOs Directory module to screen CEOs from public companies around the world.
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