Correlation Between Schweizerische Nationalbank and Journey Energy

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

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

Diversification Opportunities for Schweizerische Nationalbank and Journey Energy

0.64

Correlation Coefficient

Schweizerische Nationalbank  Journey Energy

Poor diversification

The 3 months correlation between Schweizerische and Journey is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Journey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Journey 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 Journey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Journey Energy has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Journey Energy go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Journey Energy

Assuming the 90 days horizon Schweizerische Nationalbank is expected to generate 0.54 times more return on investment than Journey Energy. However, Schweizerische Nationalbank is 1.84 times less risky than Journey Energy. It trades about -0.09 of its potential returns per unit of risk. Journey Energy is currently generating about -0.08 per unit of risk. If you would invest  418,755  in Schweizerische Nationalbank on October 20, 2024 and sell it today you would lose (41,227) from holding Schweizerische Nationalbank or give up 9.85% of portfolio value over 90 days.

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

Schweizerische Nationalbank  vs.  Journey 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.

Journey Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Journey Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Schweizerische Nationalbank and Journey Energy

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

The idea behind Schweizerische Nationalbank and Journey 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.