Correlation Between Swiss Leader and Givaudan
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Givaudan 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 Givaudan 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 Givaudan SA, you can compare the effects of market volatilities on Swiss Leader and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Givaudan.
Diversification Opportunities for Swiss Leader and Givaudan
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and Givaudan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Swiss Leader i.e., Swiss Leader and Givaudan go up and down completely randomly.
Pair Corralation between Swiss Leader and Givaudan
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.72 times more return on investment than Givaudan. However, Swiss Leader Price is 1.38 times less risky than Givaudan. It trades about -0.2 of its potential returns per unit of risk. Givaudan SA is currently generating about -0.26 per unit of risk. If you would invest 199,681 in Swiss Leader Price on August 28, 2024 and sell it today you would lose (7,703) from holding Swiss Leader Price or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Givaudan SA
Performance |
| Timeline |
Swiss Leader and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Givaudan SA
Pair trading matchups for Givaudan
Pair Trading with Swiss Leader and Givaudan
The main advantage of trading using opposite Swiss Leader and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Swiss Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. BB Biotech AG | Swiss Leader vs. Luzerner Kantonalbank AG | Swiss Leader vs. Swiss Steel Holding |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |