Correlation Between Visa and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Visa and Swiss Life 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 Visa and Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Swiss Life Holding, you can compare the effects of market volatilities on Visa and Swiss Life 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 Visa with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Swiss Life.
Diversification Opportunities for Visa and Swiss Life
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Swiss is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and Visa 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 Visa Class A are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Visa i.e., Visa and Swiss Life go up and down completely randomly.
Pair Corralation between Visa and Swiss Life
Taking into account the 90-day investment horizon Visa is expected to generate 1.29 times less return on investment than Swiss Life. But when comparing it to its historical volatility, Visa Class A is 1.16 times less risky than Swiss Life. It trades about 0.09 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,036 in Swiss Life Holding on August 31, 2024 and sell it today you would earn a total of 990.00 from holding Swiss Life Holding or generate 32.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Swiss Life Holding
Performance |
| Timeline |
| Visa Class A |
| Swiss Life Holding |
Visa and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Swiss Life
The main advantage of trading using opposite Visa and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Swiss Life 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 Life will offset losses from the drop in Swiss Life's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Swiss Life vs. Sampo Oyj | Swiss Life vs. ageas SANV | Swiss Life vs. Athene Holding | Swiss Life 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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