Correlation Between Sword Group and Neolife SA
Can any of the company-specific risk be diversified away by investing in both Sword Group and Neolife SA 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 Sword Group and Neolife SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sword Group SE and Neolife SA, you can compare the effects of market volatilities on Sword Group and Neolife SA 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 Sword Group with a short position of Neolife SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sword Group and Neolife SA.
Diversification Opportunities for Sword Group and Neolife SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sword and Neolife is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sword Group SE and Neolife SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neolife SA and Sword 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 Sword Group SE are associated (or correlated) with Neolife SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neolife SA has no effect on the direction of Sword Group i.e., Sword Group and Neolife SA go up and down completely randomly.
Pair Corralation between Sword Group and Neolife SA
Assuming the 90 days trading horizon Sword Group SE is expected to under-perform the Neolife SA. But the stock apears to be less risky and, when comparing its historical volatility, Sword Group SE is 1.79 times less risky than Neolife SA. The stock trades about -0.06 of its potential returns per unit of risk. The Neolife SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.55 in Neolife SA on November 9, 2024 and sell it today you would earn a total of 0.15 from holding Neolife SA or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sword Group SE vs. Neolife SA
Performance |
| Timeline |
| Sword Group SE |
| Neolife SA |
Sword Group and Neolife SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sword Group and Neolife SA
The main advantage of trading using opposite Sword Group and Neolife SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sword Group position performs unexpectedly, Neolife SA 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 Neolife SA will offset losses from the drop in Neolife SA's long position.| Sword Group vs. Aubay Socit Anonyme | Sword Group vs. Neurones | Sword Group vs. Rubis SCA | Sword Group vs. Linedata Services SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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