Correlation Between Swiss Leader and BVZ Holding
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and BVZ 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 Swiss Leader and BVZ Holding 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 BVZ Holding AG, you can compare the effects of market volatilities on Swiss Leader and BVZ 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 Swiss Leader with a short position of BVZ Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and BVZ Holding.
Diversification Opportunities for Swiss Leader and BVZ Holding
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Swiss and BVZ is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and BVZ Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BVZ Holding 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 BVZ Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BVZ Holding AG has no effect on the direction of Swiss Leader i.e., Swiss Leader and BVZ Holding go up and down completely randomly.
Pair Corralation between Swiss Leader and BVZ Holding
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.82 times more return on investment than BVZ Holding. However, Swiss Leader Price is 1.22 times less risky than BVZ Holding. It trades about 0.02 of its potential returns per unit of risk. BVZ Holding AG is currently generating about -0.06 per unit of risk. If you would invest 194,439 in Swiss Leader Price on September 4, 2024 and sell it today you would earn a total of 602.00 from holding Swiss Leader Price or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Swiss Leader Price vs. BVZ Holding AG
Performance |
| Timeline |
Swiss Leader and BVZ Holding Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
BVZ Holding AG
Pair trading matchups for BVZ Holding
Pair Trading with Swiss Leader and BVZ Holding
The main advantage of trading using opposite Swiss Leader and BVZ Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, BVZ 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 BVZ Holding will offset losses from the drop in BVZ Holding's long position.| Swiss Leader vs. St Galler Kantonalbank | Swiss Leader vs. Glarner Kantonalbank | Swiss Leader vs. Schweiter Technologies AG | Swiss Leader vs. Metall Zug AG |
| BVZ Holding vs. Jungfraubahn Holding AG | BVZ Holding vs. Daetwyl I | BVZ Holding vs. Also Holding AG | BVZ Holding vs. Emmi 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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