Correlation Between SwissCom and Vinci SA
Can any of the company-specific risk be diversified away by investing in both SwissCom and Vinci SA 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 Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SwissCom AG and Vinci SA ADR, you can compare the effects of market volatilities on SwissCom and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SwissCom and Vinci SA.
Diversification Opportunities for SwissCom and Vinci SA
Very poor diversification
The 3 months correlation between SwissCom and Vinci is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SwissCom AG and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of SwissCom i.e., SwissCom and Vinci SA go up and down completely randomly.
Pair Corralation between SwissCom and Vinci SA
Assuming the 90 days horizon SwissCom AG is expected to generate 0.76 times more return on investment than Vinci SA. However, SwissCom AG is 1.31 times less risky than Vinci SA. It trades about 0.01 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.03 per unit of risk. If you would invest 5,652 in SwissCom AG on September 12, 2024 and sell it today you would earn a total of 85.00 from holding SwissCom AG or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
SwissCom AG vs. Vinci SA ADR
Performance |
| Timeline |
| SwissCom AG |
| Vinci SA ADR |
SwissCom and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SwissCom and Vinci SA
The main advantage of trading using opposite SwissCom and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SwissCom position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| SwissCom vs. Telecom Argentina SA | SwissCom vs. Rogers Communications | SwissCom vs. Magyar Telekom Plc | SwissCom vs. Hellenic Telecommunications Org |
| Vinci SA vs. Arcadis NV | Vinci SA vs. China Railway Group | Vinci SA vs. Skanska AB ser | Vinci SA vs. Digital Locations |
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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