Correlation Between CSIF III and Swissinvest Real

Can any of the company-specific risk be diversified away by investing in both CSIF III and Swissinvest Real 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 CSIF III and Swissinvest Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSIF III Eq and Swissinvest Real Estate, you can compare the effects of market volatilities on CSIF III and Swissinvest Real 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 CSIF III with a short position of Swissinvest Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSIF III and Swissinvest Real.

Diversification Opportunities for CSIF III and Swissinvest Real

-0.11

Correlation Coefficient

CSIF III  Swissinvest Real

Good diversification

The 3 months correlation between CSIF and Swissinvest is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CSIF III Eq and Swissinvest Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swissinvest Real Estate and CSIF III 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 CSIF III Eq are associated (or correlated) with Swissinvest Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swissinvest Real Estate has no effect on the direction of CSIF III i.e., CSIF III and Swissinvest Real go up and down completely randomly.

Pair Corralation between CSIF III and Swissinvest Real

Assuming the 90 days trading horizon CSIF III Eq is expected to under-perform the Swissinvest Real. In addition to that, CSIF III is 1.02 times more volatile than Swissinvest Real Estate. It trades about -0.04 of its total potential returns per unit of risk. Swissinvest Real Estate is currently generating about 0.24 per unit of volatility. If you would invest  19,950  in Swissinvest Real Estate on September 28, 2024 and sell it today you would earn a total of  650.00  from holding Swissinvest Real Estate or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CSIF III Eq  vs.  Swissinvest Real Estate

CSIF III Eq

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF III Eq are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, CSIF III is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Swissinvest Real Estate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swissinvest Real Estate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Swissinvest Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CSIF III and Swissinvest Real

The main advantage of trading using opposite CSIF III and Swissinvest Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSIF III position performs unexpectedly, Swissinvest Real 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 Swissinvest Real will offset losses from the drop in Swissinvest Real's long position.

The idea behind CSIF III Eq and Swissinvest Real Estate 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.