Correlation Between Korea Closed and Swiss Helvetia

Can any of the company-specific risk be diversified away by investing in both Korea Closed and Swiss Helvetia 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 Korea Closed and Swiss Helvetia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Korea Closed and Swiss Helvetia Closed, you can compare the effects of market volatilities on Korea Closed and Swiss Helvetia 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 Korea Closed with a short position of Swiss Helvetia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Closed and Swiss Helvetia.

Diversification Opportunities for Korea Closed and Swiss Helvetia

0.93

Correlation Coefficient

Korea Closed  Swiss Helvetia

Almost no diversification

The 3 months correlation between Korea and Swiss is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Swiss Helvetia Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Helvetia Closed and Korea Closed 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 Korea Closed are associated (or correlated) with Swiss Helvetia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Helvetia Closed has no effect on the direction of Korea Closed i.e., Korea Closed and Swiss Helvetia go up and down completely randomly.

Pair Corralation between Korea Closed and Swiss Helvetia

Allowing for the 90-day total investment horizon Korea Closed is expected to under-perform the Swiss Helvetia. In addition to that, Korea Closed is 1.71 times more volatile than Swiss Helvetia Closed. It trades about -0.02 of its total potential returns per unit of risk. Swiss Helvetia Closed is currently generating about 0.02 per unit of volatility. If you would invest  753.00  in Swiss Helvetia Closed on September 12, 2024 and sell it today you would earn a total of  33.00  from holding Swiss Helvetia Closed or generate 4.38% return on investment over 90 days.

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

Korea Closed  vs.  Swiss Helvetia Closed

Korea Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korea Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite unsteady performance in the last few months, the Fund's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the mutual fund stockholders.

Swiss Helvetia Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiss Helvetia Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Korea Closed and Swiss Helvetia

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

The idea behind Korea Closed and Swiss Helvetia Closed 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.