Correlation Between Swiss Life and Swiss Life

Can any of the company-specific risk be diversified away by investing in both Swiss Life and Swiss Life 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 Life 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 Life Holding, you can compare the effects of market volatilities on Swiss Life and Swiss Life 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 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Swiss Life.

Diversification Opportunities for Swiss Life and Swiss Life

0.45

Correlation Coefficient

Swiss Life  Swiss Life

Very weak diversification

The 3 months correlation between Swiss and Swiss is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Swiss Life i.e., Swiss Life and Swiss Life go up and down completely randomly.

Pair Corralation between Swiss Life and Swiss Life

Assuming the 90 days horizon Swiss Life is expected to generate 1.82 times less return on investment than Swiss Life. In addition to that, Swiss Life is 1.19 times more volatile than Swiss Life Holding. It trades about 0.15 of its total potential returns per unit of risk. Swiss Life Holding is currently generating about 0.32 per unit of volatility. If you would invest  4,022  in Swiss Life Holding on December 4, 2024 and sell it today you would earn a total of  419.00  from holding Swiss Life Holding or generate 10.42% return on investment over 90 days.

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

Swiss Life Holding  vs.  Swiss Life Holding

Swiss Life Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Swiss Life reported solid returns over the last few months and may actually be approaching a breakup point.

Swiss Life Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Swiss Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swiss Life and Swiss Life

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

The idea behind Swiss Life Holding and Swiss Life Holding 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.