Correlation Between SWISS WATER and Fanuc

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

By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Fanuc, you can compare the effects of market volatilities on SWISS WATER and Fanuc 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 WATER with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Fanuc.

Diversification Opportunities for SWISS WATER and Fanuc

-0.41

Correlation Coefficient

SWISS WATER  Fanuc

Very good diversification

The 3 months correlation between SWISS and Fanuc is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and SWISS WATER 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 WATER DECAFFCOFFEE are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of SWISS WATER i.e., SWISS WATER and Fanuc go up and down completely randomly.

Pair Corralation between SWISS WATER and Fanuc

Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 2.15 times more return on investment than Fanuc. However, SWISS WATER is 2.15 times more volatile than Fanuc. It trades about 0.12 of its potential returns per unit of risk. Fanuc is currently generating about 0.02 per unit of risk. If you would invest  199.00  in SWISS WATER DECAFFCOFFEE on April 21, 2025 and sell it today you would earn a total of  59.00  from holding SWISS WATER DECAFFCOFFEE or generate 29.65% return on investment over 90 days.

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

SWISS WATER DECAFFCOFFEE  vs.  Fanuc

SWISS WATER DECAFFCOFFEE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SWISS WATER DECAFFCOFFEE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SWISS WATER reported solid returns over the last few months and may actually be approaching a breakup point.

Fanuc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fanuc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fanuc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SWISS WATER and Fanuc

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

The idea behind SWISS WATER DECAFFCOFFEE and Fanuc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.