Correlation Between Swiss National and Swiss Re

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

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

Diversification Opportunities for Swiss National and Swiss Re

0.0

Correlation Coefficient

Swiss National  Swiss Re

Pay attention - limited upside

The 3 months correlation between Swiss and Swiss is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Swiss National Bank and Swiss Re AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re AG and Swiss National 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 National Bank are associated (or correlated) with Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re AG has no effect on the direction of Swiss National i.e., Swiss National and Swiss Re go up and down completely randomly.

Pair Corralation between Swiss National and Swiss Re

If you would invest  0.00  in Swiss National Bank on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Swiss National Bank or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Swiss National Bank  vs.  Swiss Re AG

Swiss National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiss National Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Swiss National is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Swiss Re AG

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Re AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Swiss Re unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swiss National and Swiss Re

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

The idea behind Swiss National Bank and Swiss Re AG 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.