Correlation Between Hermes International and Swatch Group
Can any of the company-specific risk be diversified away by investing in both Hermes International and Swatch 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 Hermes International and Swatch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Swatch Group AG, you can compare the effects of market volatilities on Hermes International and Swatch 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 Hermes International with a short position of Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Swatch Group.
Diversification Opportunities for Hermes International and Swatch Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hermes and Swatch is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA and Swatch Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group AG and Hermes International 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 Hermes International SCA are associated (or correlated) with Swatch Group. 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 AG has no effect on the direction of Hermes International i.e., Hermes International and Swatch Group go up and down completely randomly.
Pair Corralation between Hermes International and Swatch Group
Assuming the 90 days horizon Hermes International is expected to generate 6.16 times less return on investment than Swatch Group. In addition to that, Hermes International is 1.22 times more volatile than Swatch Group AG. It trades about 0.01 of its total potential returns per unit of risk. Swatch Group AG is currently generating about 0.07 per unit of volatility. If you would invest 936.00 in Swatch Group AG on September 11, 2025 and sell it today you would earn a total of 75.00 from holding Swatch Group AG or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hermes International SCA vs. Swatch Group AG
Performance |
| Timeline |
| Hermes International SCA |
| Swatch Group AG |
Hermes International and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Swatch Group
The main advantage of trading using opposite Hermes International and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Swatch 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 Swatch Group will offset losses from the drop in Swatch Group's long position.| Hermes International vs. Christian Dior SE | Hermes International vs. Burberry Group Plc | Hermes International vs. Compagnie Financiere Richemont | Hermes International vs. Hermes International SA |
| Swatch Group vs. Pandora AS | Swatch Group vs. Volvo Car AB | Swatch Group vs. HELLA GmbH Co | Swatch Group vs. CCL Industries |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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