Correlation Between Swire Properties and VONOVIA SE

Can any of the company-specific risk be diversified away by investing in both Swire Properties and VONOVIA SE 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 Swire Properties and VONOVIA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Swire Properties Limited and VONOVIA SE ADR, you can compare the effects of market volatilities on Swire Properties and VONOVIA SE 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 Swire Properties with a short position of VONOVIA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and VONOVIA SE.

Diversification Opportunities for Swire Properties and VONOVIA SE

0.6

Correlation Coefficient

Swire Properties  VONOVIA SE

Poor diversification

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

Pair Corralation between Swire Properties and VONOVIA SE

Assuming the 90 days horizon Swire Properties is expected to generate 1.0 times less return on investment than VONOVIA SE. In addition to that, Swire Properties is 1.69 times more volatile than VONOVIA SE ADR. It trades about 0.03 of its total potential returns per unit of risk. VONOVIA SE ADR is currently generating about 0.04 per unit of volatility. If you would invest  948.00  in VONOVIA SE ADR on April 20, 2025 and sell it today you would earn a total of  432.00  from holding VONOVIA SE ADR or generate 45.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Swire Properties Limited  vs.  VONOVIA SE ADR

Swire Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swire Properties Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Swire Properties may actually be approaching a critical reversion point that can send shares even higher in August 2025.

VONOVIA SE ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VONOVIA SE ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VONOVIA SE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Swire Properties and VONOVIA SE

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

The idea behind Swire Properties Limited and VONOVIA SE ADR 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 CEOs Directory module to screen CEOs from public companies around the world.