Correlation Between Stellar and Swiss Helvetia
Can any of the company-specific risk be diversified away by investing in both Stellar and Swiss Helvetia 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 Stellar and Swiss Helvetia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Swiss Helvetia Closed, you can compare the effects of market volatilities on Stellar and Swiss Helvetia 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 Stellar with a short position of Swiss Helvetia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Swiss Helvetia.
Diversification Opportunities for Stellar and Swiss Helvetia
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stellar and Swiss is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Swiss Helvetia Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Helvetia Closed and Stellar 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 Stellar are associated (or correlated) with Swiss Helvetia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Helvetia Closed has no effect on the direction of Stellar i.e., Stellar and Swiss Helvetia go up and down completely randomly.
Pair Corralation between Stellar and Swiss Helvetia
Assuming the 90 days trading horizon Stellar is expected to generate 5.57 times more return on investment than Swiss Helvetia. However, Stellar is 5.57 times more volatile than Swiss Helvetia Closed. It trades about 0.17 of its potential returns per unit of risk. Swiss Helvetia Closed is currently generating about 0.36 per unit of risk. If you would invest 38.00 in Stellar on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Stellar or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Stellar vs. Swiss Helvetia Closed
Performance |
| Timeline |
| Stellar |
| Swiss Helvetia Closed |
Stellar and Swiss Helvetia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Swiss Helvetia
The main advantage of trading using opposite Stellar and Swiss Helvetia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Swiss Helvetia 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 Swiss Helvetia will offset losses from the drop in Swiss Helvetia's long position.The idea behind Stellar and Swiss Helvetia Closed 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.| Swiss Helvetia vs. MFS High Yield | Swiss Helvetia vs. MFS High Income | Swiss Helvetia vs. MFS Multimarket Income | Swiss Helvetia vs. MFS Intermediate Income |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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