Correlation Between Schweizerische Nationalbank and Collective Mining

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

By analyzing existing cross correlation between Schweizerische Nationalbank and Collective Mining, you can compare the effects of market volatilities on Schweizerische Nationalbank and Collective Mining 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 Schweizerische Nationalbank with a short position of Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Collective Mining.

Diversification Opportunities for Schweizerische Nationalbank and Collective Mining

-0.46

Correlation Coefficient

Schweizerische Nationalbank  Collective Mining

Very good diversification

The 3 months correlation between Schweizerische and Collective is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Collective Mining go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Collective Mining

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Collective Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 1.53 times less risky than Collective Mining. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Collective Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  317.00  in Collective Mining on September 3, 2024 and sell it today you would earn a total of  14.00  from holding Collective Mining or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	35.94%
Values	Daily Returns

Schweizerische Nationalbank  vs.  Collective Mining

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweizerische Nationalbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Collective Mining

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Collective Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Collective Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schweizerische Nationalbank and Collective Mining

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

The idea behind Schweizerische Nationalbank and Collective Mining 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.