Correlation Between SNC and SwissBorg

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

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

Diversification Opportunities for SNC and SwissBorg

-0.13

Correlation Coefficient

SNC  SwissBorg

Good diversification

The 3 months correlation between SNC and SwissBorg is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SNC and SwissBorg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissBorg and SNC 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 SNC are associated (or correlated) with SwissBorg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissBorg has no effect on the direction of SNC i.e., SNC and SwissBorg go up and down completely randomly.

Pair Corralation between SNC and SwissBorg

Assuming the 90 days trading horizon SNC is expected to under-perform the SwissBorg. But the crypto coin apears to be less risky and, when comparing its historical volatility, SNC is 1.15 times less risky than SwissBorg. The crypto coin trades about -0.03 of its potential returns per unit of risk. The SwissBorg is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  15.00  in SwissBorg on September 2, 2024 and sell it today you would earn a total of  17.00  from holding SwissBorg or generate 113.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SNC  vs.  SwissBorg

SNC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for SNC shareholders.

SwissBorg

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SwissBorg are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SwissBorg exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SNC and SwissBorg

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

The idea behind SNC and SwissBorg 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.