Correlation Between Schweizerische Nationalbank and FlatexDEGIRO

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Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and FlatexDEGIRO 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 Schweizerische Nationalbank and FlatexDEGIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and flatexDEGIRO AG, you can compare the effects of market volatilities on Schweizerische Nationalbank and FlatexDEGIRO 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 Schweizerische Nationalbank with a short position of FlatexDEGIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and FlatexDEGIRO.

Diversification Opportunities for Schweizerische Nationalbank and FlatexDEGIRO

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Schweizerische and FlatexDEGIRO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and flatexDEGIRO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on flatexDEGIRO AG and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with FlatexDEGIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of flatexDEGIRO AG has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and FlatexDEGIRO go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and FlatexDEGIRO

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the FlatexDEGIRO. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 3.31 times less risky than FlatexDEGIRO. The pink sheet trades about -0.22 of its potential returns per unit of risk. The flatexDEGIRO AG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,119  in flatexDEGIRO AG on September 15, 2024 and sell it today you would earn a total of  396.00  from holding flatexDEGIRO AG or generate 35.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Schweizerische Nationalbank  vs.  flatexDEGIRO AG

 Performance 
       Timeline  
Schweizerische Nationalbank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Schweizerische Nationalbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
flatexDEGIRO AG 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in flatexDEGIRO AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FlatexDEGIRO reported solid returns over the last few months and may actually be approaching a breakup point.

Schweizerische Nationalbank and FlatexDEGIRO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Schweizerische Nationalbank and FlatexDEGIRO

The main advantage of trading using opposite Schweizerische Nationalbank and FlatexDEGIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, FlatexDEGIRO 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 FlatexDEGIRO will offset losses from the drop in FlatexDEGIRO's long position.
The idea behind Schweizerische Nationalbank and flatexDEGIRO AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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