Correlation Between Swiss Life and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Swiss Life and Emmi AG 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 Emmi AG 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 Emmi AG, you can compare the effects of market volatilities on Swiss Life and Emmi AG 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 Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Emmi AG.
Diversification Opportunities for Swiss Life and Emmi AG
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swiss and Emmi is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi 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 Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Swiss Life i.e., Swiss Life and Emmi AG go up and down completely randomly.
Pair Corralation between Swiss Life and Emmi AG
Assuming the 90 days trading horizon Swiss Life Holding is expected to generate 1.03 times more return on investment than Emmi AG. However, Swiss Life is 1.03 times more volatile than Emmi AG. It trades about 0.08 of its potential returns per unit of risk. Emmi AG is currently generating about -0.01 per unit of risk. If you would invest 49,223 in Swiss Life Holding on September 1, 2024 and sell it today you would earn a total of 22,957 from holding Swiss Life Holding or generate 46.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. Emmi AG
Performance |
| Timeline |
| Swiss Life Holding |
| Emmi AG |
Swiss Life and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and Emmi AG
The main advantage of trading using opposite Swiss Life and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life position performs unexpectedly, Emmi AG 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 Emmi AG will offset losses from the drop in Emmi AG'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 |
| Emmi AG vs. Jungfraubahn Holding AG | Emmi AG vs. Amsterdam Commodities NV | Emmi AG vs. Flow Traders BV | Emmi AG vs. ForFarmers NV |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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