Correlation Between Swiss Leader and PSP Swiss
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and PSP Swiss 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 PSP Swiss 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 PSP Swiss Property, you can compare the effects of market volatilities on Swiss Leader and PSP Swiss 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 PSP Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and PSP Swiss.
Diversification Opportunities for Swiss Leader and PSP Swiss
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Swiss and PSP is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and PSP Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSP Swiss Property 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 PSP Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSP Swiss Property has no effect on the direction of Swiss Leader i.e., Swiss Leader and PSP Swiss go up and down completely randomly.
Pair Corralation between Swiss Leader and PSP Swiss
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.74 times more return on investment than PSP Swiss. However, Swiss Leader Price is 1.36 times less risky than PSP Swiss. It trades about 0.07 of its potential returns per unit of risk. PSP Swiss Property is currently generating about -0.01 per unit of risk. If you would invest 192,381 in Swiss Leader Price on April 24, 2025 and sell it today you would earn a total of 4,673 from holding Swiss Leader Price or generate 2.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Swiss Leader Price vs. PSP Swiss Property
Performance |
Timeline |
Swiss Leader and PSP Swiss Volatility Contrast
Predicted Return Density |
Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
PSP Swiss Property
Pair trading matchups for PSP Swiss
Pair Trading with Swiss Leader and PSP Swiss
The main advantage of trading using opposite Swiss Leader and PSP Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, PSP Swiss 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 PSP Swiss will offset losses from the drop in PSP Swiss' 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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