Correlation Between Swiss Life and SGS SA
Can any of the company-specific risk be diversified away by investing in both Swiss Life and SGS SA 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 SGS SA 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 SGS SA, you can compare the effects of market volatilities on Swiss Life and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and SGS SA.
Diversification Opportunities for Swiss Life and SGS SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swiss and SGS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Swiss Life i.e., Swiss Life and SGS SA go up and down completely randomly.
Pair Corralation between Swiss Life and SGS SA
Assuming the 90 days trading horizon Swiss Life Holding is expected to generate 0.74 times more return on investment than SGS SA. However, Swiss Life Holding is 1.36 times less risky than SGS SA. It trades about 0.03 of its potential returns per unit of risk. SGS SA is currently generating about -0.23 per unit of risk. If you would invest 71,520 in Swiss Life Holding on August 28, 2024 and sell it today you would earn a total of 420.00 from holding Swiss Life Holding or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. SGS SA
Performance |
| Timeline |
| Swiss Life Holding |
| SGS SA |
Swiss Life and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and SGS SA
The main advantage of trading using opposite Swiss Life and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| Swiss Life vs. Helvetia Holding AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Adecco Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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