Correlation Between Schweizerische Nationalbank and Secure Energy

Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and Secure 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 Secure 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 Secure Energy Services, you can compare the effects of market volatilities on Schweizerische Nationalbank and Secure 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Secure Energy.

Diversification Opportunities for Schweizerische Nationalbank and Secure Energy

-0.64

Correlation Coefficient

Schweizerische Nationalbank  Secure Energy

Excellent diversification

The 3 months correlation between Schweizerische and Secure is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Secure Energy go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Secure Energy

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Secure Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 1.42 times less risky than Secure Energy. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Secure Energy Services is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  854.00  in Secure Energy Services on September 13, 2024 and sell it today you would earn a total of  329.00  from holding Secure Energy Services or generate 38.52% return on investment over 90 days.

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

Schweizerische Nationalbank  vs.  Secure Energy Services

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.

Secure Energy Services

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Secure Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schweizerische Nationalbank and Secure Energy

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

The idea behind Schweizerische Nationalbank and Secure Energy Services 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.