Correlation Between Swiss Helvetia and Mexico Equity

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

By analyzing existing cross correlation between Swiss Helvetia Closed and Mexico Equity And, you can compare the effects of market volatilities on Swiss Helvetia and Mexico Equity 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 Helvetia with a short position of Mexico Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Helvetia and Mexico Equity.

Diversification Opportunities for Swiss Helvetia and Mexico Equity

0.82

Correlation Coefficient

Swiss Helvetia  Mexico Equity

Very poor diversification

The 3 months correlation between Swiss and Mexico is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Helvetia Closed and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And and Swiss Helvetia 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 Helvetia Closed are associated (or correlated) with Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Swiss Helvetia i.e., Swiss Helvetia and Mexico Equity go up and down completely randomly.

Pair Corralation between Swiss Helvetia and Mexico Equity

Considering the 90-day investment horizon Swiss Helvetia Closed is expected to generate 0.94 times more return on investment than Mexico Equity. However, Swiss Helvetia Closed is 1.07 times less risky than Mexico Equity. It trades about 0.29 of its potential returns per unit of risk. Mexico Equity And is currently generating about 0.1 per unit of risk. If you would invest  740.00  in Swiss Helvetia Closed on December 27, 2024 and sell it today you would earn a total of  165.00  from holding Swiss Helvetia Closed or generate 22.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Swiss Helvetia Closed  vs.  Mexico Equity And

Swiss Helvetia Closed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Helvetia Closed are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly uncertain basic indicators, Swiss Helvetia showed solid returns over the last few months and may actually be approaching a breakup point.

Mexico Equity And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mexico Equity And are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile basic indicators, Mexico Equity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Swiss Helvetia and Mexico Equity

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

The idea behind Swiss Helvetia Closed and Mexico Equity And 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.