Correlation Between Swiss Leader and Schweizerische Nationalbank
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Schweizerische Nationalbank 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 Swiss Leader and Schweizerische Nationalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and Schweizerische Nationalbank, you can compare the effects of market volatilities on Swiss Leader and Schweizerische Nationalbank 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 Swiss Leader with a short position of Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Schweizerische Nationalbank.
Diversification Opportunities for Swiss Leader and Schweizerische Nationalbank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swiss and Schweizerische is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank and Swiss Leader 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 Swiss Leader Price are associated (or correlated) with Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Swiss Leader i.e., Swiss Leader and Schweizerische Nationalbank go up and down completely randomly.
Pair Corralation between Swiss Leader and Schweizerische Nationalbank
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.48 times more return on investment than Schweizerische Nationalbank. However, Swiss Leader Price is 2.1 times less risky than Schweizerische Nationalbank. It trades about 0.05 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.04 per unit of risk. If you would invest 164,762 in Swiss Leader Price on September 13, 2024 and sell it today you would earn a total of 28,855 from holding Swiss Leader Price or generate 17.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.2% |
Values | Daily Returns |
Swiss Leader Price vs. Schweizerische Nationalbank
Performance |
Timeline |
Swiss Leader and Schweizerische Nationalbank Volatility Contrast
Predicted Return Density |
Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Schweizerische Nationalbank
Pair trading matchups for Schweizerische Nationalbank
Pair Trading with Swiss Leader and Schweizerische Nationalbank
The main advantage of trading using opposite Swiss Leader and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank's long position.Swiss Leader vs. mobilezone ag | Swiss Leader vs. Metall Zug AG | Swiss Leader vs. VP Bank AG | Swiss Leader vs. Hypothekarbank Lenzburg AG |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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