Correlation Between Temenos Group and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Temenos Group 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 Temenos Group and Swiss Re into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Temenos Group AG and Swiss Re AG, you can compare the effects of market volatilities on Temenos Group 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 Temenos Group with a short position of Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Temenos Group and Swiss Re.
Diversification Opportunities for Temenos Group and Swiss Re
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Temenos and Swiss is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Temenos Group 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 Temenos Group 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 Temenos Group 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 Temenos Group i.e., Temenos Group and Swiss Re go up and down completely randomly.
Pair Corralation between Temenos Group and Swiss Re
Assuming the 90 days trading horizon Temenos Group AG is expected to generate 2.22 times more return on investment than Swiss Re. However, Temenos Group is 2.22 times more volatile than Swiss Re AG. It trades about 0.46 of its potential returns per unit of risk. Swiss Re AG is currently generating about 0.3 per unit of risk. If you would invest 6,585 in Temenos Group AG on November 5, 2024 and sell it today you would earn a total of 1,210 from holding Temenos Group AG or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Temenos Group AG vs. Swiss Re AG
Performance |
| Timeline |
| Temenos Group AG |
| Swiss Re AG |
Temenos Group and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Temenos Group and Swiss Re
The main advantage of trading using opposite Temenos Group and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Temenos Group 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.| Temenos Group vs. Logitech International SA | Temenos Group vs. Straumann Holding AG | Temenos Group vs. Geberit AG | Temenos Group vs. VAT Group AG |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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