Correlation Between 1125 SCHWYZ and 1125 GDF

Can any of the company-specific risk be diversified away by investing in both 1125 SCHWYZ and 1125 GDF 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 1125 SCHWYZ and 1125 GDF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1125 SCHWYZ KB and 1125 GDF SUEZ, you can compare the effects of market volatilities on 1125 SCHWYZ and 1125 GDF 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 1125 SCHWYZ with a short position of 1125 GDF. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1125 SCHWYZ and 1125 GDF.

Diversification Opportunities for 1125 SCHWYZ and 1125 GDF

0.0

Correlation Coefficient

1125 SCHWYZ  1125 GDF

Pay attention - limited upside

The 3 months correlation between 1125 and 1125 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1125 SCHWYZ KB and 1125 GDF SUEZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1125 GDF SUEZ and 1125 SCHWYZ 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 1125 SCHWYZ KB are associated (or correlated) with 1125 GDF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1125 GDF SUEZ has no effect on the direction of 1125 SCHWYZ i.e., 1125 SCHWYZ and 1125 GDF go up and down completely randomly.

Pair Corralation between 1125 SCHWYZ and 1125 GDF

If you would invest (100.00) in 1125 GDF SUEZ on September 28, 2024 and sell it today you would earn a total of  100.00  from holding 1125 GDF SUEZ or generate -100.0% return on investment over 90 days.

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

1125 SCHWYZ KB  vs.  1125 GDF SUEZ

1125 SCHWYZ KB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1125 SCHWYZ KB has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 1125 SCHWYZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

1125 GDF SUEZ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1125 GDF SUEZ has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 1125 GDF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 1125 SCHWYZ and 1125 GDF

The main advantage of trading using opposite 1125 SCHWYZ and 1125 GDF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1125 SCHWYZ position performs unexpectedly, 1125 GDF 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 1125 GDF will offset losses from the drop in 1125 GDF's long position.

The idea behind 1125 SCHWYZ KB and 1125 GDF SUEZ 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.