Correlation Between Swiss Leader and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Sulzer AG 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 Sulzer AG 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 Sulzer AG, you can compare the effects of market volatilities on Swiss Leader and Sulzer AG 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 Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Sulzer AG.
Diversification Opportunities for Swiss Leader and Sulzer AG
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and Sulzer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG 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 Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Swiss Leader i.e., Swiss Leader and Sulzer AG go up and down completely randomly.
Pair Corralation between Swiss Leader and Sulzer AG
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the Sulzer AG. But the index apears to be less risky and, when comparing its historical volatility, Swiss Leader Price is 2.05 times less risky than Sulzer AG. The index trades about 0.0 of its potential returns per unit of risk. The Sulzer AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,080 in Sulzer AG on August 31, 2024 and sell it today you would earn a total of 1,200 from holding Sulzer AG or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Swiss Leader Price vs. Sulzer AG
Performance |
| Timeline |
Swiss Leader and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Sulzer AG
Pair trading matchups for Sulzer AG
Pair Trading with Swiss Leader and Sulzer AG
The main advantage of trading using opposite Swiss Leader and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG's long position.| Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Adval Tech Holding | Swiss Leader vs. Luzerner Kantonalbank AG | Swiss Leader vs. Zurich Insurance Group |
| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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