Correlation Between Schweiter Technologies and Trane Technologies

Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Trane Technologies 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 Trane Technologies 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 Trane Technologies plc, you can compare the effects of market volatilities on Schweiter Technologies and Trane Technologies 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 Trane Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Trane Technologies.

Diversification Opportunities for Schweiter Technologies and Trane Technologies

0.0

Correlation Coefficient

Schweiter Technologies  Trane Technologies

Pay attention - limited upside

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

Pair Corralation between Schweiter Technologies and Trane Technologies

If you would invest  76,866  in Schweiter Technologies AG on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Schweiter Technologies AG or generate 0.0% return on investment over 90 days.

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

Schweiter Technologies AG  vs.  Trane Technologies plc

Schweiter Technologies

Risk-Adjusted Performance

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.

Trane Technologies plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trane Technologies plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Schweiter Technologies and Trane Technologies

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

The idea behind Schweiter Technologies AG and Trane Technologies 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.