Correlation Between Symphony Environmental and Schweiter Technologies

Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Schweiter 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 Symphony Environmental and Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Symphony Environmental Technologies and Schweiter Technologies AG, you can compare the effects of market volatilities on Symphony Environmental and Schweiter 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 Symphony Environmental with a short position of Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Schweiter Technologies.

Diversification Opportunities for Symphony Environmental and Schweiter Technologies

0.16

Correlation Coefficient

Symphony Environmental  Schweiter Technologies

Average diversification

The 3 months correlation between Symphony and Schweiter is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Schweiter Technologies go up and down completely randomly.

Pair Corralation between Symphony Environmental and Schweiter Technologies

Assuming the 90 days trading horizon Symphony Environmental is expected to generate 7.67 times less return on investment than Schweiter Technologies. In addition to that, Symphony Environmental is 1.51 times more volatile than Schweiter Technologies AG. It trades about 0.0 of its total potential returns per unit of risk. Schweiter Technologies AG is currently generating about 0.04 per unit of volatility. If you would invest  39,000  in Schweiter Technologies AG on September 13, 2024 and sell it today you would earn a total of  2,000  from holding Schweiter Technologies AG or generate 5.13% return on investment over 90 days.

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

Symphony Environmental Technol  vs.  Schweiter Technologies AG

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Symphony Environmental is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Schweiter Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schweiter Technologies AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Schweiter Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Symphony Environmental and Schweiter Technologies

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

The idea behind Symphony Environmental Technologies and Schweiter Technologies 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.