Correlation Between Straumann Holding and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Swiss Re 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 Straumann Holding and Swiss Re into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Swiss Re AG, you can compare the effects of market volatilities on Straumann Holding and Swiss Re 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 Straumann Holding with a short position of Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Swiss Re.
Diversification Opportunities for Straumann Holding and Swiss Re
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Straumann and Swiss is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Swiss Re AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re AG and Straumann Holding 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 Straumann Holding AG are associated (or correlated) with Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re AG has no effect on the direction of Straumann Holding i.e., Straumann Holding and Swiss Re go up and down completely randomly.
Pair Corralation between Straumann Holding and Swiss Re
Assuming the 90 days trading horizon Straumann Holding AG is expected to under-perform the Swiss Re. In addition to that, Straumann Holding is 1.42 times more volatile than Swiss Re AG. It trades about -0.01 of its total potential returns per unit of risk. Swiss Re AG is currently generating about 0.08 per unit of volatility. If you would invest 11,215 in Swiss Re AG on August 28, 2024 and sell it today you would earn a total of 1,720 from holding Swiss Re AG or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Straumann Holding AG vs. Swiss Re AG
Performance |
| Timeline |
| Straumann Holding |
| Swiss Re AG |
Straumann Holding and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Swiss Re
The main advantage of trading using opposite Straumann Holding and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Swiss Re 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 Re will offset losses from the drop in Swiss Re's long position.| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan SA |
| Swiss Re vs. Zurich Insurance Group | Swiss Re vs. Swiss Life Holding | Swiss Re vs. Novartis AG | Swiss Re vs. UBS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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