Correlation Between SwissCom and 01 Communique

Can any of the company-specific risk be diversified away by investing in both SwissCom and 01 Communique 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 SwissCom and 01 Communique into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SwissCom AG and 01 Communique Laboratory, you can compare the effects of market volatilities on SwissCom and 01 Communique 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 SwissCom with a short position of 01 Communique. Check out your portfolio center. Please also check ongoing floating volatility patterns of SwissCom and 01 Communique.

Diversification Opportunities for SwissCom and 01 Communique

-0.44

Correlation Coefficient

SwissCom  01 Communique

Very good diversification

The 3 months correlation between SwissCom and OONEF is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SwissCom AG and 01 Communique Laboratory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 01 Communique Laboratory and SwissCom 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 SwissCom AG are associated (or correlated) with 01 Communique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 01 Communique Laboratory has no effect on the direction of SwissCom i.e., SwissCom and 01 Communique go up and down completely randomly.

Pair Corralation between SwissCom and 01 Communique

Assuming the 90 days horizon SwissCom AG is expected to under-perform the 01 Communique. But the pink sheet apears to be less risky and, when comparing its historical volatility, SwissCom AG is 21.36 times less risky than 01 Communique. The pink sheet trades about -0.08 of its potential returns per unit of risk. The 01 Communique Laboratory is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  5.00  in 01 Communique Laboratory on September 26, 2024 and sell it today you would earn a total of  14.00  from holding 01 Communique Laboratory or generate 280.0% return on investment over 90 days.

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

SwissCom AG  vs.  01 Communique Laboratory

SwissCom AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SwissCom AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

01 Communique Laboratory

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SwissCom and 01 Communique

The main advantage of trading using opposite SwissCom and 01 Communique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SwissCom position performs unexpectedly, 01 Communique 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 01 Communique will offset losses from the drop in 01 Communique's long position.

The idea behind SwissCom AG and 01 Communique Laboratory 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.