Correlation Between Schweiter Technologies and Primary Health

Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Primary Health 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 Schweiter Technologies and Primary Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schweiter Technologies AG and Primary Health Properties, you can compare the effects of market volatilities on Schweiter Technologies and Primary Health 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 Schweiter Technologies with a short position of Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Primary Health.

Diversification Opportunities for Schweiter Technologies and Primary Health

0.25

Correlation Coefficient

Schweiter Technologies  Primary Health

Modest diversification

The 3 months correlation between Schweiter and Primary is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties and Schweiter Technologies 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 Schweiter Technologies AG are associated (or correlated) with Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Primary Health go up and down completely randomly.

Pair Corralation between Schweiter Technologies and Primary Health

Assuming the 90 days trading horizon Schweiter Technologies AG is expected to generate 2.06 times more return on investment than Primary Health. However, Schweiter Technologies is 2.06 times more volatile than Primary Health Properties. It trades about -0.01 of its potential returns per unit of risk. Primary Health Properties is currently generating about -0.13 per unit of risk. If you would invest  42,550  in Schweiter Technologies AG on September 30, 2024 and sell it today you would lose (1,200) from holding Schweiter Technologies AG or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Schweiter Technologies AG  vs.  Primary Health Properties

Schweiter Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweiter Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Primary Health Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primary Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Schweiter Technologies and Primary Health

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

The idea behind Schweiter Technologies AG and Primary Health Properties 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.