Correlation Between Swiss Life and BVZ Holding
Can any of the company-specific risk be diversified away by investing in both Swiss Life and BVZ Holding 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 Swiss Life and BVZ Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Life Holding and BVZ Holding AG, you can compare the effects of market volatilities on Swiss Life and BVZ Holding 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 Swiss Life with a short position of BVZ Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and BVZ Holding.
Diversification Opportunities for Swiss Life and BVZ Holding
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swiss and BVZ is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and BVZ Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BVZ Holding AG and Swiss Life 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 Swiss Life Holding are associated (or correlated) with BVZ Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BVZ Holding AG has no effect on the direction of Swiss Life i.e., Swiss Life and BVZ Holding go up and down completely randomly.
Pair Corralation between Swiss Life and BVZ Holding
Assuming the 90 days trading horizon Swiss Life Holding is expected to under-perform the BVZ Holding. In addition to that, Swiss Life is 1.49 times more volatile than BVZ Holding AG. It trades about -0.14 of its total potential returns per unit of risk. BVZ Holding AG is currently generating about -0.03 per unit of volatility. If you would invest 89,500 in BVZ Holding AG on September 6, 2024 and sell it today you would lose (500.00) from holding BVZ Holding AG or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Swiss Life Holding vs. BVZ Holding AG
Performance |
| Timeline |
| Swiss Life Holding |
| BVZ Holding AG |
Swiss Life and BVZ Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and BVZ Holding
The main advantage of trading using opposite Swiss Life and BVZ Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life position performs unexpectedly, BVZ Holding 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 BVZ Holding will offset losses from the drop in BVZ Holding's long position.| Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Swiss Re AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Lonza Group AG |
| BVZ Holding vs. Jungfraubahn Holding AG | BVZ Holding vs. Daetwyl I | BVZ Holding vs. Also Holding AG | BVZ Holding vs. Emmi AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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