Correlation Between PSP Swiss and Cemat AS

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

By analyzing existing cross correlation between PSP Swiss Property and Cemat AS, you can compare the effects of market volatilities on PSP Swiss and Cemat AS 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 PSP Swiss with a short position of Cemat AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSP Swiss and Cemat AS.

Diversification Opportunities for PSP Swiss and Cemat AS

-0.16

Correlation Coefficient

PSP Swiss  Cemat AS

Good diversification

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

Pair Corralation between PSP Swiss and Cemat AS

Assuming the 90 days trading horizon PSP Swiss Property is expected to under-perform the Cemat AS. But the stock apears to be less risky and, when comparing its historical volatility, PSP Swiss Property is 1.6 times less risky than Cemat AS. The stock trades about -0.04 of its potential returns per unit of risk. The Cemat AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Cemat AS on April 25, 2025 and sell it today you would earn a total of  3.00  from holding Cemat AS or generate 3.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

PSP Swiss Property  vs.  Cemat AS

PSP Swiss Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days PSP Swiss Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PSP Swiss is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cemat AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cemat AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Cemat AS is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PSP Swiss and Cemat AS

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

The idea behind PSP Swiss Property and Cemat AS 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.