Correlation Between Salvatore Ferragamo and Swatch

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

By analyzing existing cross correlation between Salvatore Ferragamo SpA and The Swatch Group, you can compare the effects of market volatilities on Salvatore Ferragamo and Swatch 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 Salvatore Ferragamo with a short position of Swatch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salvatore Ferragamo and Swatch.

Diversification Opportunities for Salvatore Ferragamo and Swatch

0.0

Correlation Coefficient

Salvatore Ferragamo  Swatch

Pay attention - limited upside

The 3 months correlation between Salvatore and Swatch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salvatore Ferragamo SpA and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group and Salvatore Ferragamo 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 Salvatore Ferragamo SpA are associated (or correlated) with Swatch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of Salvatore Ferragamo i.e., Salvatore Ferragamo and Swatch go up and down completely randomly.

Pair Corralation between Salvatore Ferragamo and Swatch

If you would invest (100.00) in The Swatch Group on January 19, 2024 and sell it today you would earn a total of  100.00  from holding The Swatch Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Salvatore Ferragamo SpA  vs.  The Swatch Group

Salvatore Ferragamo SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salvatore Ferragamo SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Swatch Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Swatch Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Swatch is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Salvatore Ferragamo and Swatch

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

The idea behind Salvatore Ferragamo SpA and The Swatch Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.