Correlation Between Swatch Group and MEDICAL FACILITIES

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

By analyzing existing cross correlation between The Swatch Group and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Swatch Group and MEDICAL FACILITIES 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 Swatch Group with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swatch Group and MEDICAL FACILITIES.

Diversification Opportunities for Swatch Group and MEDICAL FACILITIES

-0.8

Correlation Coefficient

Swatch Group  MEDICAL FACILITIES

Pay attention - limited upside

The 3 months correlation between Swatch and MEDICAL is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Swatch Group and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Swatch Group 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 The Swatch Group are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Swatch Group i.e., Swatch Group and MEDICAL FACILITIES go up and down completely randomly.

Pair Corralation between Swatch Group and MEDICAL FACILITIES

Assuming the 90 days trading horizon The Swatch Group is expected to under-perform the MEDICAL FACILITIES. In addition to that, Swatch Group is 1.33 times more volatile than MEDICAL FACILITIES NEW. It trades about -0.02 of its total potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.07 per unit of volatility. If you would invest  517.00  in MEDICAL FACILITIES NEW on October 5, 2024 and sell it today you would earn a total of  503.00  from holding MEDICAL FACILITIES NEW or generate 97.29% return on investment over 90 days.

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

The Swatch Group  vs.  MEDICAL FACILITIES NEW

Swatch Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Swatch Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days MEDICAL FACILITIES NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, MEDICAL FACILITIES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swatch Group and MEDICAL FACILITIES

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

The idea behind The Swatch Group and MEDICAL FACILITIES NEW 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.