Correlation Between Bossard Holding and Schweiter Technologies

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

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

Diversification Opportunities for Bossard Holding and Schweiter Technologies

0.29

Correlation Coefficient

Bossard Holding  Schweiter Technologies

Modest diversification

The 3 months correlation between Bossard and Schweiter is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bossard Holding AG and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Bossard Holding 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 Bossard Holding AG are associated (or correlated) with Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Bossard Holding i.e., Bossard Holding and Schweiter Technologies go up and down completely randomly.

Pair Corralation between Bossard Holding and Schweiter Technologies

Assuming the 90 days trading horizon Bossard Holding AG is expected to under-perform the Schweiter Technologies. In addition to that, Bossard Holding is 1.02 times more volatile than Schweiter Technologies AG. It trades about -0.16 of its total potential returns per unit of risk. Schweiter Technologies AG is currently generating about 0.02 per unit of volatility. If you would invest  40,200  in Schweiter Technologies AG on September 27, 2024 and sell it today you would earn a total of  150.00  from holding Schweiter Technologies AG or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bossard Holding AG  vs.  Schweiter Technologies AG

Bossard Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bossard Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Schweiter Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweiter Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Schweiter Technologies 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 Bossard Holding and Schweiter Technologies

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

The idea behind Bossard Holding AG and Schweiter Technologies AG 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.