Correlation Between Swiss Leader and Kardex
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Kardex 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 Kardex 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 Kardex, you can compare the effects of market volatilities on Swiss Leader and Kardex 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 Kardex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Kardex.
Diversification Opportunities for Swiss Leader and Kardex
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swiss and Kardex is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Kardex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardex 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 Kardex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardex has no effect on the direction of Swiss Leader i.e., Swiss Leader and Kardex go up and down completely randomly.
Pair Corralation between Swiss Leader and Kardex
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the Kardex. But the index apears to be less risky and, when comparing its historical volatility, Swiss Leader Price is 2.13 times less risky than Kardex. The index trades about 0.0 of its potential returns per unit of risk. The Kardex is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25,200 in Kardex on September 1, 2024 and sell it today you would earn a total of 2,150 from holding Kardex or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Kardex
Performance |
| Timeline |
Swiss Leader and Kardex Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Kardex
Pair trading matchups for Kardex
Pair Trading with Swiss Leader and Kardex
The main advantage of trading using opposite Swiss Leader and Kardex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Kardex 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 Kardex will offset losses from the drop in Kardex's long position.| Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Thurgauer Kantonalbank | Swiss Leader vs. mobilezone ag | Swiss Leader vs. Zurich Insurance Group |
| Kardex vs. Interroll Holding AG | Kardex vs. VAT Group AG | Kardex vs. Comet Holding AG | Kardex vs. Bossard Holding 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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