Correlation Between Schweizerische Nationalbank and Surge Energy
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and Surge Energy 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 Surge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and Surge Energy, you can compare the effects of market volatilities on Schweizerische Nationalbank and Surge Energy 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 Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Surge Energy.
Diversification Opportunities for Schweizerische Nationalbank and Surge Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schweizerische and Surge is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Energy 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Surge Energy go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and Surge Energy
Assuming the 90 days horizon Schweizerische Nationalbank is expected to generate 0.8 times more return on investment than Surge Energy. However, Schweizerische Nationalbank is 1.25 times less risky than Surge Energy. It trades about -0.01 of its potential returns per unit of risk. Surge Energy is currently generating about -0.03 per unit of risk. If you would invest 433,553 in Schweizerische Nationalbank on September 13, 2024 and sell it today you would lose (58,553) from holding Schweizerische Nationalbank or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. Surge Energy
Performance |
| Timeline |
| Schweizerische Nationalbank |
| Surge Energy |
Schweizerische Nationalbank and Surge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and Surge Energy
The main advantage of trading using opposite Schweizerische Nationalbank and Surge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, Surge Energy 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 Surge Energy will offset losses from the drop in Surge Energy's long position.The idea behind Schweizerische Nationalbank and Surge Energy 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.
| Surge Energy vs. POSCO Holdings | Surge Energy vs. Schweizerische Nationalbank | Surge Energy vs. Berkshire Hathaway | Surge Energy vs. Berkshire Hathaway |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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