Correlation Between Sulzer AG and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both Sulzer AG and Belimo 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 Sulzer AG and Belimo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and Belimo Holding, you can compare the effects of market volatilities on Sulzer AG and Belimo 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 Sulzer AG with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Belimo Holding.
Diversification Opportunities for Sulzer AG and Belimo Holding
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sulzer and Belimo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and Sulzer AG 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 Sulzer AG are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Sulzer AG i.e., Sulzer AG and Belimo Holding go up and down completely randomly.
Pair Corralation between Sulzer AG and Belimo Holding
Assuming the 90 days trading horizon Sulzer AG is expected to under-perform the Belimo Holding. In addition to that, Sulzer AG is 1.45 times more volatile than Belimo Holding. It trades about -0.2 of its total potential returns per unit of risk. Belimo Holding is currently generating about 0.04 per unit of volatility. If you would invest 57,600 in Belimo Holding on August 26, 2024 and sell it today you would earn a total of 450.00 from holding Belimo Holding or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sulzer AG vs. Belimo Holding
Performance |
| Timeline |
| Sulzer AG |
| Belimo Holding |
Sulzer AG and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sulzer AG and Belimo Holding
The main advantage of trading using opposite Sulzer AG and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG position performs unexpectedly, Belimo 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 Belimo Holding will offset losses from the drop in Belimo Holding's long position.| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group AG |
| Belimo Holding vs. Swiss Re AG | Belimo Holding vs. Zurich Insurance Group | Belimo Holding vs. Swiss Life Holding | Belimo Holding vs. Novartis AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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