Correlation Between Swiss Leader and Carlo Gavazzi
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Carlo Gavazzi 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 Swiss Leader and Carlo Gavazzi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and Carlo Gavazzi Holding, you can compare the effects of market volatilities on Swiss Leader and Carlo Gavazzi 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 Swiss Leader with a short position of Carlo Gavazzi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Carlo Gavazzi.
Diversification Opportunities for Swiss Leader and Carlo Gavazzi
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and Carlo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Carlo Gavazzi Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlo Gavazzi Holding and Swiss Leader 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 Swiss Leader Price are associated (or correlated) with Carlo Gavazzi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlo Gavazzi Holding has no effect on the direction of Swiss Leader i.e., Swiss Leader and Carlo Gavazzi go up and down completely randomly.
Pair Corralation between Swiss Leader and Carlo Gavazzi
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.41 times more return on investment than Carlo Gavazzi. However, Swiss Leader Price is 2.46 times less risky than Carlo Gavazzi. It trades about -0.15 of its potential returns per unit of risk. Carlo Gavazzi Holding is currently generating about -0.25 per unit of risk. If you would invest 189,969 in Swiss Leader Price on January 30, 2024 and sell it today you would lose (4,380) from holding Swiss Leader Price or give up 2.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.0% |
Values | Daily Returns |
Swiss Leader Price vs. Carlo Gavazzi Holding
Performance |
Timeline |
Swiss Leader and Carlo Gavazzi Volatility Contrast
Predicted Return Density |
Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Carlo Gavazzi Holding
Pair trading matchups for Carlo Gavazzi
Pair Trading with Swiss Leader and Carlo Gavazzi
The main advantage of trading using opposite Swiss Leader and Carlo Gavazzi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Carlo Gavazzi 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 Carlo Gavazzi will offset losses from the drop in Carlo Gavazzi's long position.Swiss Leader vs. Cembra Money Bank | Swiss Leader vs. Softwareone Holding | Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Liechtensteinische Landesbank AG |
Carlo Gavazzi vs. Inficon Holding | Carlo Gavazzi vs. Belimo Holding | Carlo Gavazzi vs. Interroll Holding AG | Carlo Gavazzi vs. Comet Holding AG |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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