Correlation Between Swiss Life and Swiss National

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

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

Diversification Opportunities for Swiss Life and Swiss National

0.0

Correlation Coefficient

Swiss Life  Swiss National

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 Life Holding 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 Swiss Life 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 Life Holding 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 Swiss Life i.e., Swiss Life and Swiss National go up and down completely randomly.

Pair Corralation between Swiss Life and Swiss National

If you would invest  3,700  in Swiss Life Holding on October 8, 2024 and sell it today you would earn a total of  20.00  from holding Swiss Life Holding or generate 0.54% return on investment over 90 days.

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

Swiss Life Holding  vs.  Swiss National Bank

Swiss Life Holding

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Swiss Life 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

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.

Pair Trading with Swiss Life and Swiss National

The main advantage of trading using opposite Swiss Life and Swiss National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life 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 Swiss Life Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.