Correlation Between Swissquote Group and Vontobel Holding
Can any of the company-specific risk be diversified away by investing in both Swissquote Group 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 Swissquote Group and Vontobel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swissquote Group Holding and Vontobel Holding, you can compare the effects of market volatilities on Swissquote Group 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 Swissquote Group with a short position of Vontobel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swissquote Group and Vontobel Holding.
Diversification Opportunities for Swissquote Group and Vontobel Holding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swissquote and Vontobel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Swissquote Group Holding and Vontobel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vontobel Holding and Swissquote Group 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 Swissquote Group Holding 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 Swissquote Group i.e., Swissquote Group and Vontobel Holding go up and down completely randomly.
Pair Corralation between Swissquote Group and Vontobel Holding
Assuming the 90 days trading horizon Swissquote Group Holding is expected to generate 1.36 times more return on investment than Vontobel Holding. However, Swissquote Group is 1.36 times more volatile than Vontobel Holding. It trades about 0.54 of its potential returns per unit of risk. Vontobel Holding is currently generating about 0.17 per unit of risk. If you would invest 34,900 in Swissquote Group Holding on October 25, 2024 and sell it today you would earn a total of 4,340 from holding Swissquote Group Holding or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swissquote Group Holding vs. Vontobel Holding
Performance |
| Timeline |
| Swissquote Group Holding |
| Vontobel Holding |
Swissquote Group and Vontobel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swissquote Group and Vontobel Holding
The main advantage of trading using opposite Swissquote Group and Vontobel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swissquote Group 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.| Swissquote Group vs. Logitech International SA | Swissquote Group vs. Swiss Life Holding | Swissquote Group vs. VAT Group AG | Swissquote Group vs. Partners Group Holding |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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