Correlation Between Autoneum Holding and Swiss Re

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

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

Diversification Opportunities for Autoneum Holding and Swiss Re

0.05

Correlation Coefficient

Autoneum Holding  Swiss Re

Significant diversification

The 3 months correlation between Autoneum and Swiss is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Autoneum Holding AG 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 Autoneum Holding 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 Autoneum Holding AG 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 Autoneum Holding i.e., Autoneum Holding and Swiss Re go up and down completely randomly.

Pair Corralation between Autoneum Holding and Swiss Re

Assuming the 90 days trading horizon Autoneum Holding AG is expected to generate 1.26 times more return on investment than Swiss Re. However, Autoneum Holding is 1.26 times more volatile than Swiss Re AG. It trades about 0.43 of its potential returns per unit of risk. Swiss Re AG is currently generating about 0.3 per unit of risk. If you would invest  11,600  in Autoneum Holding AG on October 22, 2024 and sell it today you would earn a total of  920.00  from holding Autoneum Holding AG or generate 7.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Autoneum Holding AG  vs.  Swiss Re AG

Autoneum Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Autoneum Holding AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Autoneum Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated 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 fairly weak basic indicators, Swiss Re showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autoneum Holding and Swiss Re

The main advantage of trading using opposite Autoneum Holding and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoneum Holding 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 Autoneum Holding AG 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.