Correlation Between Schindler and Mikron Holding

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

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

Diversification Opportunities for Schindler and Mikron Holding

-0.78

Correlation Coefficient

Schindler  Mikron Holding

Pay attention - limited upside

The 3 months correlation between Schindler and Mikron is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Schindler Ps and Mikron Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mikron Holding AG and Schindler 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 Schindler Ps are associated (or correlated) with Mikron Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mikron Holding AG has no effect on the direction of Schindler i.e., Schindler and Mikron Holding go up and down completely randomly.

Pair Corralation between Schindler and Mikron Holding

Assuming the 90 days trading horizon Schindler Ps is expected to generate 0.52 times more return on investment than Mikron Holding. However, Schindler Ps is 1.94 times less risky than Mikron Holding. It trades about 0.1 of its potential returns per unit of risk. Mikron Holding AG is currently generating about -0.2 per unit of risk. If you would invest  24,160  in Schindler Ps on September 15, 2024 and sell it today you would earn a total of  1,680  from holding Schindler Ps or generate 6.95% return on investment over 90 days.

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

Schindler Ps  vs.  Mikron Holding AG

Schindler Ps

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schindler Ps are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Schindler may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mikron Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mikron 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.

Pair Trading with Schindler and Mikron Holding

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

The idea behind Schindler Ps and Mikron Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.