Correlation Between Implenia and Swissquote Group

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

By analyzing existing cross correlation between Implenia AG and Swissquote Group Holding, you can compare the effects of market volatilities on Implenia and Swissquote Group 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 Implenia with a short position of Swissquote Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Swissquote Group.

Diversification Opportunities for Implenia and Swissquote Group

-0.55

Correlation Coefficient

Implenia  Swissquote Group

Excellent diversification

The 3 months correlation between Implenia and Swissquote is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Swissquote Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swissquote Group Holding and Implenia 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 Implenia AG are associated (or correlated) with Swissquote Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swissquote Group Holding has no effect on the direction of Implenia i.e., Implenia and Swissquote Group go up and down completely randomly.

Pair Corralation between Implenia and Swissquote Group

Assuming the 90 days trading horizon Implenia is expected to generate 9.82 times less return on investment than Swissquote Group. But when comparing it to its historical volatility, Implenia AG is 1.09 times less risky than Swissquote Group. It trades about 0.02 of its potential returns per unit of risk. Swissquote Group Holding is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  28,920  in Swissquote Group Holding on September 13, 2024 and sell it today you would earn a total of  6,660  from holding Swissquote Group Holding or generate 23.03% return on investment over 90 days.

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

Implenia AG  vs.  Swissquote Group Holding

Implenia AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Implenia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Swissquote Group Holding

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swissquote Group Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swissquote Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Implenia and Swissquote Group

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

The idea behind Implenia AG and Swissquote Group Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.