Correlation Between Swiss Leader and Swiss Prime
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Swiss Prime 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 Swiss Prime 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 Swiss Prime Site, you can compare the effects of market volatilities on Swiss Leader and Swiss Prime 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 Swiss Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Swiss Prime.
Diversification Opportunities for Swiss Leader and Swiss Prime
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Swiss and Swiss is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Swiss Prime Site in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Prime Site 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 Swiss Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Prime Site has no effect on the direction of Swiss Leader i.e., Swiss Leader and Swiss Prime go up and down completely randomly.
Pair Corralation between Swiss Leader and Swiss Prime
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the Swiss Prime. In addition to that, Swiss Leader is 1.18 times more volatile than Swiss Prime Site. It trades about -0.2 of its total potential returns per unit of risk. Swiss Prime Site is currently generating about 0.02 per unit of volatility. If you would invest 9,525 in Swiss Prime Site on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Swiss Prime Site or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Swiss Prime Site
Performance |
| Timeline |
Swiss Leader and Swiss Prime Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Swiss Prime Site
Pair trading matchups for Swiss Prime
Pair Trading with Swiss Leader and Swiss Prime
The main advantage of trading using opposite Swiss Leader and Swiss Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Swiss Prime 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 Swiss Prime will offset losses from the drop in Swiss Prime'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 |
| Swiss Prime vs. PSP Swiss Property | Swiss Prime vs. Allreal Holding | Swiss Prime vs. Helvetia Holding AG | Swiss Prime vs. Baloise 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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