Correlation Between Swiss Prime and Plazza AG

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Can any of the company-specific risk be diversified away by investing in both Swiss Prime and Plazza AG 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 Prime and Plazza AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Prime Site and Plazza AG, you can compare the effects of market volatilities on Swiss Prime and Plazza AG 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 Prime with a short position of Plazza AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Prime and Plazza AG.

Diversification Opportunities for Swiss Prime and Plazza AG

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Swiss and Plazza is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Prime Site and Plazza AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plazza AG and Swiss Prime 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 Prime Site are associated (or correlated) with Plazza AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plazza AG has no effect on the direction of Swiss Prime i.e., Swiss Prime and Plazza AG go up and down completely randomly.

Pair Corralation between Swiss Prime and Plazza AG

Assuming the 90 days trading horizon Swiss Prime is expected to generate 3.66 times less return on investment than Plazza AG. In addition to that, Swiss Prime is 1.81 times more volatile than Plazza AG. It trades about 0.06 of its total potential returns per unit of risk. Plazza AG is currently generating about 0.42 per unit of volatility. If you would invest  35,300  in Plazza AG on April 23, 2025 and sell it today you would earn a total of  4,600  from holding Plazza AG or generate 13.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Swiss Prime Site  vs.  Plazza AG

 Performance 
       Timeline  
Swiss Prime Site 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Prime Site are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Swiss Prime is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Plazza AG 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Plazza AG are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Plazza AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Swiss Prime and Plazza AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Swiss Prime and Plazza AG

The main advantage of trading using opposite Swiss Prime and Plazza AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Prime position performs unexpectedly, Plazza AG 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 Plazza AG will offset losses from the drop in Plazza AG's long position.
The idea behind Swiss Prime Site and Plazza AG 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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