Correlation Between Schweiter Technologies and MT Bank

Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and MT Bank 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 Schweiter Technologies and MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schweiter Technologies AG and MT Bank Corp, you can compare the effects of market volatilities on Schweiter Technologies and MT Bank 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 Schweiter Technologies with a short position of MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and MT Bank.

Diversification Opportunities for Schweiter Technologies and MT Bank

-0.27

Correlation Coefficient

Schweiter Technologies  MT Bank

Very good diversification

The 3 months correlation between Schweiter and 0JW2 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp and Schweiter Technologies 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 Schweiter Technologies AG are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and MT Bank go up and down completely randomly.

Pair Corralation between Schweiter Technologies and MT Bank

Assuming the 90 days trading horizon Schweiter Technologies AG is expected to generate 1.28 times more return on investment than MT Bank. However, Schweiter Technologies is 1.28 times more volatile than MT Bank Corp. It trades about 0.08 of its potential returns per unit of risk. MT Bank Corp is currently generating about -0.16 per unit of risk. If you would invest  40,800  in Schweiter Technologies AG on December 4, 2024 and sell it today you would earn a total of  3,725  from holding Schweiter Technologies AG or generate 9.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Schweiter Technologies AG  vs.  MT Bank Corp

Schweiter Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schweiter Technologies AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Schweiter Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MT Bank Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days MT Bank Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Schweiter Technologies and MT Bank

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

The idea behind Schweiter Technologies AG and MT Bank Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.