Correlation Between Cembra Money and Swiss Leader
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Swiss Leader 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 Cembra Money and Swiss Leader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Swiss Leader Price, you can compare the effects of market volatilities on Cembra Money and Swiss Leader 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 Cembra Money with a short position of Swiss Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Swiss Leader.
Diversification Opportunities for Cembra Money and Swiss Leader
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cembra and Swiss is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Swiss Leader Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Leader Price and Cembra Money 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 Cembra Money Bank are associated (or correlated) with Swiss Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Leader Price has no effect on the direction of Cembra Money i.e., Cembra Money and Swiss Leader go up and down completely randomly.
Pair Corralation between Cembra Money and Swiss Leader
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.94 times more return on investment than Swiss Leader. However, Cembra Money Bank is 1.06 times less risky than Swiss Leader. It trades about 0.13 of its potential returns per unit of risk. Swiss Leader Price is currently generating about -0.2 per unit of risk. If you would invest 7,870 in Cembra Money Bank on August 29, 2024 and sell it today you would earn a total of 180.00 from holding Cembra Money Bank or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. Swiss Leader Price
Performance |
| Timeline |
Cembra Money and Swiss Leader Volatility Contrast
Predicted Return Density |
| Returns |
Cembra Money Bank
Pair trading matchups for Cembra Money
Swiss Leader Price
Pair trading matchups for Swiss Leader
Pair Trading with Cembra Money and Swiss Leader
The main advantage of trading using opposite Cembra Money and Swiss Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Swiss Leader 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 Leader will offset losses from the drop in Swiss Leader's long position.| Cembra Money vs. Banque Cantonale | Cembra Money vs. St Galler Kantonalbank | Cembra Money vs. PSP Swiss Property | Cembra Money vs. Berner Kantonalbank AG |
| Swiss Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. BB Biotech AG | Swiss Leader vs. Luzerner Kantonalbank AG | Swiss Leader vs. Swiss Steel Holding |
Check out your portfolio center.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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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