Correlation Between Swiss Leader and COSMO Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals 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 COSMO Pharmaceuticals SA, you can compare the effects of market volatilities on Swiss Leader and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and COSMO Pharmaceuticals.
Diversification Opportunities for Swiss Leader and COSMO Pharmaceuticals
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swiss and COSMO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and COSMO Pharmaceuticals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO Pharmaceuticals has no effect on the direction of Swiss Leader i.e., Swiss Leader and COSMO Pharmaceuticals go up and down completely randomly.
Pair Corralation between Swiss Leader and COSMO Pharmaceuticals
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.73 times more return on investment than COSMO Pharmaceuticals. However, Swiss Leader Price is 1.37 times less risky than COSMO Pharmaceuticals. It trades about -0.13 of its potential returns per unit of risk. COSMO Pharmaceuticals SA is currently generating about -0.49 per unit of risk. If you would invest 198,305 in Swiss Leader Price on August 25, 2024 and sell it today you would lose (5,098) from holding Swiss Leader Price or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. COSMO Pharmaceuticals SA
Performance |
| Timeline |
Swiss Leader and COSMO Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
COSMO Pharmaceuticals SA
Pair trading matchups for COSMO Pharmaceuticals
Pair Trading with Swiss Leader and COSMO Pharmaceuticals
The main advantage of trading using opposite Swiss Leader and COSMO Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, COSMO Pharmaceuticals 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 COSMO Pharmaceuticals will offset losses from the drop in COSMO Pharmaceuticals' long position.| Swiss Leader vs. St Galler Kantonalbank | Swiss Leader vs. VP Bank AG | Swiss Leader vs. Cembra Money Bank | Swiss Leader vs. Metall Zug 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |