Correlation Between Swiss Prime and Zug Estates
Can any of the company-specific risk be diversified away by investing in both Swiss Prime and Zug Estates 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 Prime and Zug Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Prime Site and Zug Estates Holding, you can compare the effects of market volatilities on Swiss Prime and Zug Estates 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 Prime with a short position of Zug Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Prime and Zug Estates.
Diversification Opportunities for Swiss Prime and Zug Estates
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swiss and Zug is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Prime Site and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding and Swiss Prime 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 Prime Site are associated (or correlated) with Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Swiss Prime i.e., Swiss Prime and Zug Estates go up and down completely randomly.
Pair Corralation between Swiss Prime and Zug Estates
Assuming the 90 days trading horizon Swiss Prime Site is expected to generate 0.72 times more return on investment than Zug Estates. However, Swiss Prime Site is 1.38 times less risky than Zug Estates. It trades about 0.06 of its potential returns per unit of risk. Zug Estates Holding is currently generating about 0.04 per unit of risk. If you would invest 7,596 in Swiss Prime Site on August 25, 2024 and sell it today you would earn a total of 1,989 from holding Swiss Prime Site or generate 26.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Swiss Prime Site vs. Zug Estates Holding
Performance |
| Timeline |
| Swiss Prime Site |
| Zug Estates Holding |
Swiss Prime and Zug Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Prime and Zug Estates
The main advantage of trading using opposite Swiss Prime and Zug Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Prime position performs unexpectedly, Zug Estates 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 Zug Estates will offset losses from the drop in Zug Estates' long position.| Swiss Prime vs. PSP Swiss Property | Swiss Prime vs. Allreal Holding | Swiss Prime vs. Helvetia Holding AG | Swiss Prime vs. Baloise Holding AG |
| Zug Estates vs. Allreal Holding | Zug Estates vs. PSP Swiss Property | Zug Estates vs. Mobimo Hldg | Zug Estates vs. Swiss Prime Site |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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