Correlation Between Swiss Life and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Swiss Life and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Swiss Life and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Cembra Money.
Diversification Opportunities for Swiss Life and Cembra Money
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swiss and Cembra is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Swiss Life i.e., Swiss Life and Cembra Money go up and down completely randomly.
Pair Corralation between Swiss Life and Cembra Money
Assuming the 90 days trading horizon Swiss Life Holding is expected to generate 1.03 times more return on investment than Cembra Money. However, Swiss Life is 1.03 times more volatile than Cembra Money Bank. It trades about 0.08 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.05 per unit of risk. If you would invest 49,421 in Swiss Life Holding on November 5, 2024 and sell it today you would earn a total of 25,279 from holding Swiss Life Holding or generate 51.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. Cembra Money Bank
Performance |
| Timeline |
| Swiss Life Holding |
| Cembra Money Bank |
Swiss Life and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and Cembra Money
The main advantage of trading using opposite Swiss Life and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money'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 |
| Cembra Money vs. Helvetia Holding AG | Cembra Money vs. Swiss Life Holding | Cembra Money vs. Baloise Holding AG | Cembra Money vs. Logitech International SA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |