Correlation Between Swiss Steel and Logitech International
Can any of the company-specific risk be diversified away by investing in both Swiss Steel and Logitech International 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 Steel and Logitech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Steel Holding and Logitech International SA, you can compare the effects of market volatilities on Swiss Steel and Logitech International 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 Steel with a short position of Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Steel and Logitech International.
Diversification Opportunities for Swiss Steel and Logitech International
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and Logitech is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Steel Holding and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International and Swiss Steel 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 Steel Holding are associated (or correlated) with Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of Swiss Steel i.e., Swiss Steel and Logitech International go up and down completely randomly.
Pair Corralation between Swiss Steel and Logitech International
Assuming the 90 days trading horizon Swiss Steel Holding is expected to under-perform the Logitech International. In addition to that, Swiss Steel is 2.4 times more volatile than Logitech International SA. It trades about -0.29 of its total potential returns per unit of risk. Logitech International SA is currently generating about 0.0 per unit of volatility. If you would invest 7,423 in Logitech International SA on September 1, 2024 and sell it today you would lose (273.00) from holding Logitech International SA or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Steel Holding vs. Logitech International SA
Performance |
| Timeline |
| Swiss Steel Holding |
| Logitech International |
Swiss Steel and Logitech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Steel and Logitech International
The main advantage of trading using opposite Swiss Steel and Logitech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Steel position performs unexpectedly, Logitech International 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 Logitech International will offset losses from the drop in Logitech International's long position.| Swiss Steel vs. OC Oerlikon Corp | Swiss Steel vs. Meyer Burger Tech | Swiss Steel vs. Evolva Holding SA | Swiss Steel vs. Sulzer AG |
| Logitech International vs. Geberit AG | Logitech International vs. Sika AG | Logitech International vs. Lonza Group AG | Logitech International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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