Correlation Between Swiss Life and NN Group
Can any of the company-specific risk be diversified away by investing in both Swiss Life and NN Group 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 NN Group 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 NN Group NV, you can compare the effects of market volatilities on Swiss Life and NN Group 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 NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and NN Group.
Diversification Opportunities for Swiss Life and NN Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swiss and NNGRY is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV 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 NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Swiss Life i.e., Swiss Life and NN Group go up and down completely randomly.
Pair Corralation between Swiss Life and NN Group
Assuming the 90 days horizon Swiss Life Holding is expected to generate 0.91 times more return on investment than NN Group. However, Swiss Life Holding is 1.1 times less risky than NN Group. It trades about 0.06 of its potential returns per unit of risk. NN Group NV is currently generating about 0.03 per unit of risk. If you would invest 2,668 in Swiss Life Holding on October 20, 2024 and sell it today you would earn a total of 1,341 from holding Swiss Life Holding or generate 50.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. NN Group NV
Performance |
| Timeline |
| Swiss Life Holding |
| NN Group NV |
Swiss Life and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and NN Group
The main advantage of trading using opposite Swiss Life and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group's long position.| Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Allianz SE | Swiss Life vs. Swiss Life Holding | Swiss Life vs. Zurich Insurance Group |
| NN Group vs. Sampo Oyj | NN Group vs. ageas SANV | NN Group vs. Athene Holding | NN Group vs. Assicurazioni Generali SpA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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