Correlation Between Swiss Leader and CS Real
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and CS Real 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 CS Real 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 CS Real Estate, you can compare the effects of market volatilities on Swiss Leader and CS Real 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 CS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and CS Real.
Diversification Opportunities for Swiss Leader and CS Real
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swiss and HOSP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and CS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS Real Estate 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 CS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS Real Estate has no effect on the direction of Swiss Leader i.e., Swiss Leader and CS Real go up and down completely randomly.
Pair Corralation between Swiss Leader and CS Real
Assuming the 90 days trading horizon Swiss Leader is expected to generate 5.0 times less return on investment than CS Real. But when comparing it to its historical volatility, Swiss Leader Price is 2.79 times less risky than CS Real. It trades about 0.14 of its potential returns per unit of risk. CS Real Estate is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 9,800 in CS Real Estate on September 20, 2024 and sell it today you would earn a total of 650.00 from holding CS Real Estate or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. CS Real Estate
Performance |
| Timeline |
Swiss Leader and CS Real Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
CS Real Estate
Pair trading matchups for CS Real
Pair Trading with Swiss Leader and CS Real
The main advantage of trading using opposite Swiss Leader and CS Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, CS Real 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 CS Real will offset losses from the drop in CS Real's long position.| Swiss Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. Metall Zug AG | Swiss Leader vs. Zuger Kantonalbank | Swiss Leader vs. Schweizerische Nationalbank |
| CS Real vs. SPDR Dow Jones | CS Real vs. Baloise Holding AG | CS Real vs. SPDR FTSE UK | CS Real vs. Banque Cantonale du |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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