Correlation Between SWISS WATER and Sun Art

Can any of the company-specific risk be diversified away by investing in both SWISS WATER and Sun Art 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 Sun Art 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 Sun Art Retail, you can compare the effects of market volatilities on SWISS WATER and Sun Art 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 Sun Art. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Sun Art.

Diversification Opportunities for SWISS WATER and Sun Art

0.19

Correlation Coefficient

SWISS WATER  Sun Art

Average diversification

The 3 months correlation between SWISS and Sun is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Sun Art Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Art Retail 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 Sun Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Art Retail has no effect on the direction of SWISS WATER i.e., SWISS WATER and Sun Art go up and down completely randomly.

Pair Corralation between SWISS WATER and Sun Art

Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 1.01 times more return on investment than Sun Art. However, SWISS WATER is 1.01 times more volatile than Sun Art Retail. It trades about 0.12 of its potential returns per unit of risk. Sun Art Retail is currently generating about 0.1 per unit of risk. If you would invest  202.00  in SWISS WATER DECAFFCOFFEE on April 24, 2025 and sell it today you would earn a total of  56.00  from holding SWISS WATER DECAFFCOFFEE or generate 27.72% return on investment over 90 days.

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

SWISS WATER DECAFFCOFFEE  vs.  Sun Art Retail

SWISS WATER DECAFFCOFFEE

Risk-Adjusted Performance

Good

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 fragile basic indicators, SWISS WATER reported solid returns over the last few months and may actually be approaching a breakup point.

Sun Art Retail

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Art Retail are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sun Art unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SWISS WATER and Sun Art

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

The idea behind SWISS WATER DECAFFCOFFEE and Sun Art Retail 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.