Correlation Between Helvetia Holding and Siegfried Holding

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Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and Siegfried Holding 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 Helvetia Holding and Siegfried Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and Siegfried Holding, you can compare the effects of market volatilities on Helvetia Holding and Siegfried Holding 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 Helvetia Holding with a short position of Siegfried Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Siegfried Holding.

Diversification Opportunities for Helvetia Holding and Siegfried Holding

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Helvetia and Siegfried is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Siegfried Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siegfried Holding and Helvetia 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 Helvetia Holding AG are associated (or correlated) with Siegfried Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siegfried Holding has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Siegfried Holding go up and down completely randomly.

Pair Corralation between Helvetia Holding and Siegfried Holding

Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.6 times more return on investment than Siegfried Holding. However, Helvetia Holding AG is 1.67 times less risky than Siegfried Holding. It trades about 0.39 of its potential returns per unit of risk. Siegfried Holding is currently generating about -0.09 per unit of risk. If you would invest  14,920  in Helvetia Holding AG on December 25, 2024 and sell it today you would earn a total of  3,170  from holding Helvetia Holding AG or generate 21.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Helvetia Holding AG  vs.  Siegfried Holding

 Performance 
       Timeline  
Helvetia Holding 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding showed solid returns over the last few months and may actually be approaching a breakup point.
Siegfried Holding 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Siegfried Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Helvetia Holding and Siegfried Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Helvetia Holding and Siegfried Holding

The main advantage of trading using opposite Helvetia Holding and Siegfried Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, Siegfried Holding 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 Siegfried Holding will offset losses from the drop in Siegfried Holding's long position.
The idea behind Helvetia Holding AG and Siegfried Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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