Correlation Between Schweizerische Nationalbank and Summit Bank

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

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

Diversification Opportunities for Schweizerische Nationalbank and Summit Bank

-0.64

Correlation Coefficient

Schweizerische Nationalbank  Summit Bank

Excellent diversification

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

Pair Corralation between Schweizerische Nationalbank and Summit Bank

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Summit Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 1.87 times less risky than Summit Bank. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Summit Bank Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Summit Bank Group on October 26, 2024 and sell it today you would earn a total of  95.00  from holding Summit Bank Group or generate 7.31% return on investment over 90 days.

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

Schweizerische Nationalbank  vs.  Summit Bank Group

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 nearly stable basic indicators, Schweizerische Nationalbank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Summit Bank Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Bank Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, Summit Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Schweizerische Nationalbank and Summit Bank

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

The idea behind Schweizerische Nationalbank and Summit Bank Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.