Correlation Between Swatch Group and Mene
Can any of the company-specific risk be diversified away by investing in both Swatch Group and Mene 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 Swatch Group and Mene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swatch Group AG and Mene Inc, you can compare the effects of market volatilities on Swatch Group and Mene 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 Swatch Group with a short position of Mene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swatch Group and Mene.
Diversification Opportunities for Swatch Group and Mene
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swatch and Mene is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Swatch Group AG and Mene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mene Inc and Swatch 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 Swatch Group AG are associated (or correlated) with Mene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mene Inc has no effect on the direction of Swatch Group i.e., Swatch Group and Mene go up and down completely randomly.
Pair Corralation between Swatch Group and Mene
Assuming the 90 days horizon Swatch Group AG is expected to generate 0.26 times more return on investment than Mene. However, Swatch Group AG is 3.84 times less risky than Mene. It trades about -0.03 of its potential returns per unit of risk. Mene Inc is currently generating about -0.01 per unit of risk. If you would invest 1,113 in Swatch Group AG on November 3, 2024 and sell it today you would lose (189.00) from holding Swatch Group AG or give up 16.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swatch Group AG vs. Mene Inc
Performance |
| Timeline |
| Swatch Group AG |
| Mene Inc |
Swatch Group and Mene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swatch Group and Mene
The main advantage of trading using opposite Swatch Group and Mene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swatch Group position performs unexpectedly, Mene 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 Mene will offset losses from the drop in Mene's long position.| Swatch Group vs. Kering SA | Swatch Group vs. Burberry Group Plc | Swatch Group vs. Prada Spa PK | Swatch Group vs. Compagnie Financire Richemont |
| Mene vs. Lanvin Group Holdings | Mene vs. MYT Netherlands Parent | Mene vs. Movado Group | Mene vs. Birks Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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