Correlation Between Swiss Leader and Orell Fuessli
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Orell Fuessli 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 Orell Fuessli 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 Orell Fuessli Holding, you can compare the effects of market volatilities on Swiss Leader and Orell Fuessli 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 Orell Fuessli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Orell Fuessli.
Diversification Opportunities for Swiss Leader and Orell Fuessli
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swiss and Orell is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Orell Fuessli Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orell Fuessli Holding 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 Orell Fuessli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orell Fuessli Holding has no effect on the direction of Swiss Leader i.e., Swiss Leader and Orell Fuessli go up and down completely randomly.
Pair Corralation between Swiss Leader and Orell Fuessli
Assuming the 90 days trading horizon Swiss Leader is expected to generate 4.14 times less return on investment than Orell Fuessli. But when comparing it to its historical volatility, Swiss Leader Price is 1.11 times less risky than Orell Fuessli. It trades about 0.11 of its potential returns per unit of risk. Orell Fuessli Holding is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Orell Fuessli Holding on December 1, 2024 and sell it today you would earn a total of 500.00 from holding Orell Fuessli Holding or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Orell Fuessli Holding
Performance |
| Timeline |
Swiss Leader and Orell Fuessli Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Orell Fuessli Holding
Pair trading matchups for Orell Fuessli
Pair Trading with Swiss Leader and Orell Fuessli
The main advantage of trading using opposite Swiss Leader and Orell Fuessli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Orell Fuessli 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 Orell Fuessli will offset losses from the drop in Orell Fuessli's long position.| Swiss Leader vs. mobilezone ag | Swiss Leader vs. Elma Electronic AG | Swiss Leader vs. Glarner Kantonalbank | Swiss Leader vs. Metall Zug AG |
| Orell Fuessli vs. Hubersuhner AG | Orell Fuessli vs. Implenia AG | Orell Fuessli vs. Carlo Gavazzi Holding | Orell Fuessli vs. Mikron 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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