Correlation Between HIAG Immobilien and Swiss Prime

Can any of the company-specific risk be diversified away by investing in both HIAG Immobilien and Swiss Prime 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 HIAG Immobilien and Swiss Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HIAG Immobilien Holding and Swiss Prime Site, you can compare the effects of market volatilities on HIAG Immobilien and Swiss Prime 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 HIAG Immobilien with a short position of Swiss Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIAG Immobilien and Swiss Prime.

Diversification Opportunities for HIAG Immobilien and Swiss Prime

0.74

Correlation Coefficient

HIAG Immobilien  Swiss Prime

Poor diversification

The 3 months correlation between HIAG and Swiss is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HIAG Immobilien Holding and Swiss Prime Site in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Prime Site and HIAG Immobilien 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 HIAG Immobilien Holding are associated (or correlated) with Swiss Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Prime Site has no effect on the direction of HIAG Immobilien i.e., HIAG Immobilien and Swiss Prime go up and down completely randomly.

Pair Corralation between HIAG Immobilien and Swiss Prime

Assuming the 90 days trading horizon HIAG Immobilien Holding is expected to generate 0.88 times more return on investment than Swiss Prime. However, HIAG Immobilien Holding is 1.14 times less risky than Swiss Prime. It trades about 0.18 of its potential returns per unit of risk. Swiss Prime Site is currently generating about 0.15 per unit of risk. If you would invest  7,340  in HIAG Immobilien Holding on September 27, 2024 and sell it today you would earn a total of  1,120  from holding HIAG Immobilien Holding or generate 15.26% return on investment over 90 days.

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

HIAG Immobilien Holding  vs.  Swiss Prime Site

HIAG Immobilien Holding

Risk-Adjusted Performance

4 of 100

Modest

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

Swiss Prime Site

Risk-Adjusted Performance

4 of 100

Insignificant

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.

Pair Trading with HIAG Immobilien and Swiss Prime

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

The idea behind HIAG Immobilien Holding and Swiss Prime Site 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.