Correlation Between Chia and Swatch Group
Can any of the company-specific risk be diversified away by investing in both Chia and Swatch Group 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 Chia and Swatch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and The Swatch Group, you can compare the effects of market volatilities on Chia and Swatch Group 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 Chia with a short position of Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Swatch Group.
Diversification Opportunities for Chia and Swatch Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chia and Swatch is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chia and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group and Chia 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 Chia are associated (or correlated) with Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of Chia i.e., Chia and Swatch Group go up and down completely randomly.
Pair Corralation between Chia and Swatch Group
Assuming the 90 days trading horizon Chia is expected to under-perform the Swatch Group. In addition to that, Chia is 1.64 times more volatile than The Swatch Group. It trades about -0.01 of its total potential returns per unit of risk. The Swatch Group is currently generating about -0.01 per unit of volatility. If you would invest 1,375 in The Swatch Group on October 14, 2024 and sell it today you would lose (575.00) from holding The Swatch Group or give up 41.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 59.68% |
| Values | Daily Returns |
Chia vs. The Swatch Group
Performance |
| Timeline |
| Chia |
| Swatch Group |
Chia and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Swatch Group
The main advantage of trading using opposite Chia and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group's long position.The idea behind Chia and The Swatch Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Swatch Group vs. LVMH Mot Hennessy | Swatch Group vs. LVMH Mot Hennessy | Swatch Group vs. Christian Dior SE | Swatch Group vs. Compagnie Financire Richemont |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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