Correlation Between Logitech International and Swissquote Group

Can any of the company-specific risk be diversified away by investing in both Logitech International and Swissquote Group 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 Logitech International and Swissquote Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Logitech International SA and Swissquote Group Holding, you can compare the effects of market volatilities on Logitech International and Swissquote Group 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 Logitech International with a short position of Swissquote Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Swissquote Group.

Diversification Opportunities for Logitech International and Swissquote Group

-0.36

Correlation Coefficient

Logitech International  Swissquote Group

Very good diversification

The 3 months correlation between Logitech and Swissquote is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Swissquote Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swissquote Group Holding and Logitech International 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 Logitech International SA are associated (or correlated) with Swissquote Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swissquote Group Holding has no effect on the direction of Logitech International i.e., Logitech International and Swissquote Group go up and down completely randomly.

Pair Corralation between Logitech International and Swissquote Group

Assuming the 90 days trading horizon Logitech International is expected to generate 27.6 times less return on investment than Swissquote Group. In addition to that, Logitech International is 1.01 times more volatile than Swissquote Group Holding. It trades about 0.01 of its total potential returns per unit of risk. Swissquote Group Holding is currently generating about 0.37 per unit of volatility. If you would invest  30,000  in Swissquote Group Holding on September 5, 2024 and sell it today you would earn a total of  5,220  from holding Swissquote Group Holding or generate 17.4% return on investment over 90 days.

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

Logitech International SA  vs.  Swissquote Group Holding

Logitech International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logitech International SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Logitech International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Swissquote Group Holding

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swissquote Group Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swissquote Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logitech International and Swissquote Group

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

The idea behind Logitech International SA and Swissquote Group 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.