Correlation Between Assicurazioni Generali and Swiss Life

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

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

Diversification Opportunities for Assicurazioni Generali and Swiss Life

0.04

Correlation Coefficient

Assicurazioni Generali  Swiss Life

Significant diversification

The 3 months correlation between Assicurazioni and Swiss is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and Assicurazioni Generali 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 Assicurazioni Generali SpA are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and Swiss Life go up and down completely randomly.

Pair Corralation between Assicurazioni Generali and Swiss Life

Assuming the 90 days trading horizon Assicurazioni Generali SpA is expected to generate 0.49 times more return on investment than Swiss Life. However, Assicurazioni Generali SpA is 2.02 times less risky than Swiss Life. It trades about 0.06 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.02 per unit of risk. If you would invest  2,598  in Assicurazioni Generali SpA on September 24, 2024 and sell it today you would earn a total of  109.00  from holding Assicurazioni Generali SpA or generate 4.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Assicurazioni Generali SpA  vs.  Swiss Life Holding

Assicurazioni Generali

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Assicurazioni Generali is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Swiss Life Holding

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Swiss Life is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Assicurazioni Generali and Swiss Life

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

The idea behind Assicurazioni Generali SpA and Swiss Life 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.