Correlation Between SwissCom and Rogers Communications

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

By analyzing existing cross correlation between SwissCom AG and Rogers Communications, you can compare the effects of market volatilities on SwissCom and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of SwissCom and Rogers Communications.

Diversification Opportunities for SwissCom and Rogers Communications

0.54

Correlation Coefficient

SwissCom  Rogers Communications

Very weak diversification

The 3 months correlation between SwissCom and Rogers is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SwissCom AG and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of SwissCom i.e., SwissCom and Rogers Communications go up and down completely randomly.

Pair Corralation between SwissCom and Rogers Communications

Assuming the 90 days horizon SwissCom AG is expected to generate 0.82 times more return on investment than Rogers Communications. However, SwissCom AG is 1.22 times less risky than Rogers Communications. It trades about -0.02 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.13 per unit of risk. If you would invest  5,921  in SwissCom AG on October 25, 2024 and sell it today you would lose (300.00) from holding SwissCom AG or give up 5.07% of portfolio value over 90 days.

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

SwissCom AG  vs.  Rogers Communications

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rogers Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SwissCom and Rogers Communications

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

The idea behind SwissCom AG and Rogers Communications 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.