Correlation Between Schweiter Technologies and PHOENIX N

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

Diversification Opportunities for Schweiter Technologies and PHOENIX N

0.33

Correlation Coefficient

Schweiter Technologies  PHOENIX N

Weak diversification

The 3 months correlation between Schweiter and PHOENIX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and PHOENIX N AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX N AG 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 PHOENIX N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX N AG has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and PHOENIX N go up and down completely randomly.

Pair Corralation between Schweiter Technologies and PHOENIX N

Assuming the 90 days trading horizon Schweiter Technologies AG is expected to generate 1.5 times more return on investment than PHOENIX N. However, Schweiter Technologies is 1.5 times more volatile than PHOENIX N AG. It trades about 0.11 of its potential returns per unit of risk. PHOENIX N AG is currently generating about -0.05 per unit of risk. If you would invest  40,500  in Schweiter Technologies AG on October 6, 2024 and sell it today you would earn a total of  1,100  from holding Schweiter Technologies AG or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Schweiter Technologies AG  vs.  PHOENIX N AG

Schweiter Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Schweiter Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PHOENIX N AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHOENIX N AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Schweiter Technologies and PHOENIX N

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

The idea behind Schweiter Technologies AG and PHOENIX N 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.