Correlation Between Swiss Leader and LandisGyr Group

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

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

Diversification Opportunities for Swiss Leader and LandisGyr Group

0.57

Correlation Coefficient

Swiss Leader  LandisGyr Group

Very weak diversification

The 3 months correlation between Swiss and LandisGyr is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and LandisGyr Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandisGyr Group AG and Swiss Leader 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 Swiss Leader Price are associated (or correlated) with LandisGyr Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandisGyr Group AG has no effect on the direction of Swiss Leader i.e., Swiss Leader and LandisGyr Group go up and down completely randomly.

Pair Corralation between Swiss Leader and LandisGyr Group

Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.6 times more return on investment than LandisGyr Group. However, Swiss Leader Price is 1.68 times less risky than LandisGyr Group. It trades about -0.01 of its potential returns per unit of risk. LandisGyr Group AG is currently generating about -0.19 per unit of risk. If you would invest  195,646  in Swiss Leader Price on October 7, 2024 and sell it today you would lose (3,489) from holding Swiss Leader Price or give up 1.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Swiss Leader Price  vs.  LandisGyr Group AG

Pair Trading with Swiss Leader and LandisGyr Group

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

The idea behind Swiss Leader Price and LandisGyr Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.