Correlation Between Retail Estates and Swiss National

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

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

Diversification Opportunities for Retail Estates and Swiss National

0.0

Correlation Coefficient

Retail Estates  Swiss National

Pay attention - limited upside

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

Pair Corralation between Retail Estates and Swiss National

If you would invest  5,740  in Retail Estates NV on December 19, 2024 and sell it today you would earn a total of  190.00  from holding Retail Estates NV or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Retail Estates NV  vs.  Swiss National Bank

Retail Estates NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Estates NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Retail Estates is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Swiss National Bank

Risk-Adjusted Performance

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Retail Estates and Swiss National

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

The idea behind Retail Estates NV and Swiss National Bank 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.