Correlation Between VAT Group and Schindler Holding
Can any of the company-specific risk be diversified away by investing in both VAT Group and Schindler 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 VAT Group and Schindler Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VAT Group AG and Schindler Holding AG, you can compare the effects of market volatilities on VAT Group and Schindler 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 VAT Group with a short position of Schindler Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and Schindler Holding.
Diversification Opportunities for VAT Group and Schindler Holding
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VAT and Schindler is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Schindler Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Holding and VAT 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 VAT Group AG are associated (or correlated) with Schindler Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Holding has no effect on the direction of VAT Group i.e., VAT Group and Schindler Holding go up and down completely randomly.
Pair Corralation between VAT Group and Schindler Holding
Assuming the 90 days trading horizon VAT Group AG is expected to under-perform the Schindler Holding. In addition to that, VAT Group is 2.2 times more volatile than Schindler Holding AG. It trades about -0.01 of its total potential returns per unit of risk. Schindler Holding AG is currently generating about 0.13 per unit of volatility. If you would invest 18,924 in Schindler Holding AG on September 5, 2024 and sell it today you would earn a total of 6,526 from holding Schindler Holding AG or generate 34.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VAT Group AG vs. Schindler Holding AG
Performance |
| Timeline |
| VAT Group AG |
| Schindler Holding |
VAT Group and Schindler Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VAT Group and Schindler Holding
The main advantage of trading using opposite VAT Group and Schindler Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAT Group position performs unexpectedly, Schindler 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 Schindler Holding will offset losses from the drop in Schindler Holding's long position.| VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group Holding |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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