Correlation Between Sulzer AG and Vontobel Holding
Can any of the company-specific risk be diversified away by investing in both Sulzer AG 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 Sulzer AG and Vontobel 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 Vontobel Holding, you can compare the effects of market volatilities on Sulzer AG 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 Sulzer AG with a short position of Vontobel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Vontobel Holding.
Diversification Opportunities for Sulzer AG and Vontobel Holding
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sulzer and Vontobel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG and Vontobel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vontobel 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 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 Sulzer AG i.e., Sulzer AG and Vontobel Holding go up and down completely randomly.
Pair Corralation between Sulzer AG and Vontobel Holding
Assuming the 90 days trading horizon Sulzer AG is expected to generate 1.42 times more return on investment than Vontobel Holding. However, Sulzer AG is 1.42 times more volatile than Vontobel Holding. It trades about 0.36 of its potential returns per unit of risk. Vontobel Holding is currently generating about 0.24 per unit of risk. If you would invest 13,340 in Sulzer AG on November 4, 2024 and sell it today you would earn a total of 1,540 from holding Sulzer AG or generate 11.54% 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. Vontobel Holding
Performance |
| Timeline |
| Sulzer AG |
| Vontobel Holding |
Sulzer AG and Vontobel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sulzer AG and Vontobel Holding
The main advantage of trading using opposite Sulzer AG and Vontobel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG 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.| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group AG |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |