Correlation Between Swiss Leader and Alpine Select
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Alpine Select 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 Swiss Leader and Alpine Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and Alpine Select AG, you can compare the effects of market volatilities on Swiss Leader and Alpine Select 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 Swiss Leader with a short position of Alpine Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Alpine Select.
Diversification Opportunities for Swiss Leader and Alpine Select
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Swiss and Alpine is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Alpine Select AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Select AG and Swiss Leader 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 Swiss Leader Price are associated (or correlated) with Alpine Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Select AG has no effect on the direction of Swiss Leader i.e., Swiss Leader and Alpine Select go up and down completely randomly.
Pair Corralation between Swiss Leader and Alpine Select
Assuming the 90 days trading horizon Swiss Leader is expected to generate 11.68 times less return on investment than Alpine Select. But when comparing it to its historical volatility, Swiss Leader Price is 12.59 times less risky than Alpine Select. It trades about 0.03 of its potential returns per unit of risk. Alpine Select AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Alpine Select AG on August 25, 2024 and sell it today you would lose (460.00) from holding Alpine Select AG or give up 38.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.94% |
| Values | Daily Returns |
Swiss Leader Price vs. Alpine Select AG
Performance |
| Timeline |
Swiss Leader and Alpine Select Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Alpine Select AG
Pair trading matchups for Alpine Select
Pair Trading with Swiss Leader and Alpine Select
The main advantage of trading using opposite Swiss Leader and Alpine Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Alpine Select 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 Alpine Select will offset losses from the drop in Alpine Select's long position.| Swiss Leader vs. Metall Zug AG | Swiss Leader vs. Basler Kantonalbank | Swiss Leader vs. Zurich Insurance Group | Swiss Leader vs. mobilezone ag |
| Alpine Select vs. Santhera Pharmaceuticals Holding | Alpine Select vs. Newron Pharmaceuticals SpA | Alpine Select vs. Basilea Pharmaceutica AG | Alpine Select vs. Evolva Holding SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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