Correlation Between Swiss Leader and CPH Chemie
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and CPH Chemie 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 Leader and CPH Chemie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and CPH Chemie und, you can compare the effects of market volatilities on Swiss Leader and CPH Chemie 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 Leader with a short position of CPH Chemie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and CPH Chemie.
Diversification Opportunities for Swiss Leader and CPH Chemie
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Swiss and CPH is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and CPH Chemie und in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPH Chemie und and Swiss Leader 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 Leader Price are associated (or correlated) with CPH Chemie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPH Chemie und has no effect on the direction of Swiss Leader i.e., Swiss Leader and CPH Chemie go up and down completely randomly.
Pair Corralation between Swiss Leader and CPH Chemie
Assuming the 90 days trading horizon Swiss Leader is expected to generate 5.61 times less return on investment than CPH Chemie. But when comparing it to its historical volatility, Swiss Leader Price is 2.46 times less risky than CPH Chemie. It trades about 0.07 of its potential returns per unit of risk. CPH Chemie und is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,560 in CPH Chemie und on April 24, 2025 and sell it today you would earn a total of 940.00 from holding CPH Chemie und or generate 14.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Swiss Leader Price vs. CPH Chemie und
Performance |
Timeline |
Swiss Leader and CPH Chemie Volatility Contrast
Predicted Return Density |
Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
CPH Chemie und
Pair trading matchups for CPH Chemie
Pair Trading with Swiss Leader and CPH Chemie
The main advantage of trading using opposite Swiss Leader and CPH Chemie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, CPH Chemie 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 CPH Chemie will offset losses from the drop in CPH Chemie's long position.Swiss Leader vs. Zurich Insurance Group | Swiss Leader vs. Schweizerische Nationalbank | Swiss Leader vs. Metall Zug AG | Swiss Leader vs. Basellandschaftliche Kantonalbank |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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