Correlation Between SFS Group and Vetropack Holding
Can any of the company-specific risk be diversified away by investing in both SFS Group and Vetropack Holding 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 SFS Group and Vetropack Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFS Group AG and Vetropack Holding SA, you can compare the effects of market volatilities on SFS Group and Vetropack Holding 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 SFS Group with a short position of Vetropack Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFS Group and Vetropack Holding.
Diversification Opportunities for SFS Group and Vetropack Holding
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SFS and Vetropack is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SFS Group AG and Vetropack Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vetropack Holding and SFS Group 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 SFS Group AG are associated (or correlated) with Vetropack Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vetropack Holding has no effect on the direction of SFS Group i.e., SFS Group and Vetropack Holding go up and down completely randomly.
Pair Corralation between SFS Group and Vetropack Holding
Assuming the 90 days trading horizon SFS Group AG is expected to generate 0.61 times more return on investment than Vetropack Holding. However, SFS Group AG is 1.65 times less risky than Vetropack Holding. It trades about 0.12 of its potential returns per unit of risk. Vetropack Holding SA is currently generating about -0.29 per unit of risk. If you would invest 12,500 in SFS Group AG on September 2, 2024 and sell it today you would earn a total of 260.00 from holding SFS Group AG or generate 2.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SFS Group AG vs. Vetropack Holding SA
Performance |
Timeline |
SFS Group AG |
Vetropack Holding |
SFS Group and Vetropack Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SFS Group and Vetropack Holding
The main advantage of trading using opposite SFS Group and Vetropack Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFS Group position performs unexpectedly, Vetropack Holding 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 Vetropack Holding will offset losses from the drop in Vetropack Holding's long position.SFS Group vs. VAT Group AG | SFS Group vs. Bucher Industries AG | SFS Group vs. Comet Holding AG | SFS Group vs. Daetwyl I |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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