Correlation Between Sonova H and VAT Group
Can any of the company-specific risk be diversified away by investing in both Sonova H and VAT Group 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 Sonova H and VAT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonova H Ag and VAT Group AG, you can compare the effects of market volatilities on Sonova H and VAT Group 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 Sonova H with a short position of VAT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonova H and VAT Group.
Diversification Opportunities for Sonova H and VAT Group
Very good diversification
The 3 months correlation between Sonova and VAT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sonova H Ag and VAT Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAT Group AG and Sonova H 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 Sonova H Ag are associated (or correlated) with VAT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAT Group AG has no effect on the direction of Sonova H i.e., Sonova H and VAT Group go up and down completely randomly.
Pair Corralation between Sonova H and VAT Group
Assuming the 90 days trading horizon Sonova H Ag is expected to generate 0.65 times more return on investment than VAT Group. However, Sonova H Ag is 1.54 times less risky than VAT Group. It trades about 0.05 of its potential returns per unit of risk. VAT Group AG is currently generating about -0.09 per unit of risk. If you would invest 27,874 in Sonova H Ag on August 31, 2024 and sell it today you would earn a total of 2,206 from holding Sonova H Ag or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonova H Ag vs. VAT Group AG
Performance |
| Timeline |
| Sonova H Ag |
| VAT Group AG |
Sonova H and VAT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonova H and VAT Group
The main advantage of trading using opposite Sonova H and VAT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonova H position performs unexpectedly, VAT Group 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 VAT Group will offset losses from the drop in VAT Group's long position.| Sonova H vs. Straumann Holding AG | Sonova H vs. Geberit AG | Sonova H vs. Sika AG | Sonova H vs. Givaudan SA |
| VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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