Correlation Between Sulzer AG and Swissquote Group
Can any of the company-specific risk be diversified away by investing in both Sulzer AG 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 Sulzer AG and Swissquote Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and Swissquote Group Holding, you can compare the effects of market volatilities on Sulzer AG 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 Sulzer AG with a short position of Swissquote Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Swissquote Group.
Diversification Opportunities for Sulzer AG and Swissquote Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sulzer and Swissquote is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG 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 Sulzer AG 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 Sulzer AG 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 Sulzer AG i.e., Sulzer AG and Swissquote Group go up and down completely randomly.
Pair Corralation between Sulzer AG and Swissquote Group
Assuming the 90 days trading horizon Sulzer AG is expected to generate 3.58 times less return on investment than Swissquote Group. In addition to that, Sulzer AG is 1.04 times more volatile than Swissquote Group Holding. It trades about 0.05 of its total potential returns per unit of risk. Swissquote Group Holding is currently generating about 0.19 per unit of volatility. If you would invest 28,800 in Swissquote Group Holding on September 4, 2024 and sell it today you would earn a total of 6,420 from holding Swissquote Group Holding or generate 22.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sulzer AG vs. Swissquote Group Holding
Performance |
Timeline |
Sulzer AG |
Swissquote Group Holding |
Sulzer AG and Swissquote Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sulzer AG and Swissquote Group
The main advantage of trading using opposite Sulzer AG and Swissquote Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG 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.Sulzer AG vs. Emmi AG | ||
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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