Correlation Between Swiss Leader and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI Europe, you can compare the effects of market volatilities on Swiss Leader and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and SPDR MSCI.
Diversification Opportunities for Swiss Leader and SPDR MSCI
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and SPDR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Swiss Leader i.e., Swiss Leader and SPDR MSCI go up and down completely randomly.
Pair Corralation between Swiss Leader and SPDR MSCI
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.7 times more return on investment than SPDR MSCI. However, Swiss Leader Price is 1.43 times less risky than SPDR MSCI. It trades about 0.03 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about 0.01 per unit of risk. If you would invest 192,731 in Swiss Leader Price on September 1, 2024 and sell it today you would earn a total of 1,024 from holding Swiss Leader Price or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. SPDR MSCI Europe
Performance |
| Timeline |
Swiss Leader and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
SPDR MSCI Europe
Pair trading matchups for SPDR MSCI
Pair Trading with Swiss Leader and SPDR MSCI
The main advantage of trading using opposite Swiss Leader and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Thurgauer Kantonalbank | Swiss Leader vs. mobilezone ag | Swiss Leader vs. Zurich Insurance Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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