Correlation Between Sika AG and Schindler

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

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

Diversification Opportunities for Sika AG and Schindler

-0.68

Correlation Coefficient

Sika AG  Schindler

Excellent diversification

The 3 months correlation between Sika and Schindler is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sika AG and Schindler Ps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Ps and Sika AG 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 Sika AG are associated (or correlated) with Schindler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Ps has no effect on the direction of Sika AG i.e., Sika AG and Schindler go up and down completely randomly.

Pair Corralation between Sika AG and Schindler

Assuming the 90 days trading horizon Sika AG is expected to under-perform the Schindler. In addition to that, Sika AG is 1.23 times more volatile than Schindler Ps. It trades about -0.05 of its total potential returns per unit of risk. Schindler Ps is currently generating about 0.07 per unit of volatility. If you would invest  23,700  in Schindler Ps on September 15, 2024 and sell it today you would earn a total of  2,140  from holding Schindler Ps or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.23%
Values	Daily Returns

Sika AG  vs.  Schindler Ps

Sika AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sika AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Schindler Ps

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schindler Ps are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Schindler may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sika AG and Schindler

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

The idea behind Sika AG and Schindler Ps 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.