Correlation Between Schweiter Technologies and Noble Plc

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

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

Diversification Opportunities for Schweiter Technologies and Noble Plc

0.0

Correlation Coefficient

Schweiter Technologies  Noble Plc

Pay attention - limited upside

The 3 months correlation between Schweiter and Noble is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Noble plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble plc and Schweiter Technologies 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 Schweiter Technologies AG are associated (or correlated) with Noble Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble plc has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Noble Plc go up and down completely randomly.

Pair Corralation between Schweiter Technologies and Noble Plc

Assuming the 90 days horizon Schweiter Technologies AG is expected to under-perform the Noble Plc. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweiter Technologies AG is 3.0 times less risky than Noble Plc. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Noble plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,791  in Noble plc on October 11, 2024 and sell it today you would lose (525.00) from holding Noble plc or give up 13.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	77.78%
Values	Daily Returns

Schweiter Technologies AG  vs.  Noble plc

Schweiter Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Schweiter Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Noble Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Schweiter Technologies and Noble Plc

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

The idea behind Schweiter Technologies AG and Noble plc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.