Correlation Between Schweizerische Nationalbank and Crown Point

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

By analyzing existing cross correlation between Schweizerische Nationalbank and Crown Point Energy, you can compare the effects of market volatilities on Schweizerische Nationalbank and Crown Point 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 Crown Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Crown Point.

Diversification Opportunities for Schweizerische Nationalbank and Crown Point

0.83

Correlation Coefficient

Schweizerische Nationalbank  Crown Point

Very poor diversification

The 3 months correlation between Schweizerische and Crown is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Crown Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Point Energy 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 Crown Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Point Energy has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Crown Point go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Crown Point

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Crown Point. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 9.02 times less risky than Crown Point. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Crown Point Energy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Crown Point Energy on October 21, 2024 and sell it today you would lose (2.00) from holding Crown Point Energy or give up 33.33% of portfolio value over 90 days.

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

Schweizerische Nationalbank  vs.  Crown Point Energy

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.

Crown Point Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crown Point Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Crown Point reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schweizerische Nationalbank and Crown Point

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

The idea behind Schweizerische Nationalbank and Crown Point Energy 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.