Correlation Between Schweizerische Nationalbank and Altura Energy

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

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

Diversification Opportunities for Schweizerische Nationalbank and Altura Energy

-0.83

Correlation Coefficient

Schweizerische Nationalbank  Altura Energy

Pay attention - limited upside

The 3 months correlation between Schweizerische and Altura is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Altura Energy go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Altura Energy

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Altura Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 2.23 times less risky than Altura Energy. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Altura Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  918.00  in Altura Energy on September 13, 2024 and sell it today you would earn a total of  64.00  from holding Altura Energy or generate 6.97% return on investment over 90 days.

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

Schweizerische Nationalbank  vs.  Altura Energy

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Altura Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Altura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schweizerische Nationalbank and Altura Energy

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

The idea behind Schweizerische Nationalbank and Altura Energy 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.