Correlation Between Swiss Leader and Vontobel Holding
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Vontobel Holding 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 Vontobel Holding 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 Vontobel Holding, you can compare the effects of market volatilities on Swiss Leader and Vontobel Holding 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 Vontobel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Vontobel Holding.
Diversification Opportunities for Swiss Leader and Vontobel Holding
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Swiss and Vontobel is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Vontobel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vontobel 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 Vontobel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vontobel Holding has no effect on the direction of Swiss Leader i.e., Swiss Leader and Vontobel Holding go up and down completely randomly.
Pair Corralation between Swiss Leader and Vontobel Holding
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.59 times more return on investment than Vontobel Holding. However, Swiss Leader Price is 1.7 times less risky than Vontobel Holding. It trades about 0.6 of its potential returns per unit of risk. Vontobel Holding is currently generating about 0.18 per unit of risk. If you would invest 191,700 in Swiss Leader Price on October 26, 2024 and sell it today you would earn a total of 11,451 from holding Swiss Leader Price or generate 5.97% 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. Vontobel Holding
Performance |
| Timeline |
Swiss Leader and Vontobel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Vontobel Holding
Pair trading matchups for Vontobel Holding
Pair Trading with Swiss Leader and Vontobel Holding
The main advantage of trading using opposite Swiss Leader and Vontobel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Vontobel Holding 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 Vontobel Holding will offset losses from the drop in Vontobel Holding's long position.| Swiss Leader vs. St Galler Kantonalbank | Swiss Leader vs. Cicor Technologies | Swiss Leader vs. Zurich Insurance Group | Swiss Leader vs. Glarner Kantonalbank |
| Vontobel Holding vs. Julius Baer Gruppe | Vontobel Holding vs. Helvetia Holding AG | Vontobel Holding vs. Sulzer AG | Vontobel Holding vs. Swiss Life Holding |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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