Correlation Between Swiss Leader and PSI 20
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By analyzing existing cross correlation between Swiss Leader Price and PSI 20 Stock, you can compare the effects of market volatilities on Swiss Leader and PSI 20 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 Leader with a short position of PSI 20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and PSI 20.
Diversification Opportunities for Swiss Leader and PSI 20
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swiss and PSI is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and PSI 20 Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI 20 Stock and Swiss Leader 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 Leader Price are associated (or correlated) with PSI 20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI 20 Stock has no effect on the direction of Swiss Leader i.e., Swiss Leader and PSI 20 go up and down completely randomly.
Pair Corralation between Swiss Leader and PSI 20
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the PSI 20. But the index apears to be less risky and, when comparing its historical volatility, Swiss Leader Price is 1.43 times less risky than PSI 20. The index trades about -0.15 of its potential returns per unit of risk. The PSI 20 Stock is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 630,721 in PSI 20 Stock on January 30, 2024 and sell it today you would earn a total of 30,530 from holding PSI 20 Stock or generate 4.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Swiss Leader Price vs. PSI 20 Stock
Performance |
Timeline |
Swiss Leader and PSI 20 Volatility Contrast
Predicted Return Density |
Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Pair Trading with Swiss Leader and PSI 20
The main advantage of trading using opposite Swiss Leader and PSI 20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, PSI 20 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 PSI 20 will offset losses from the drop in PSI 20's long position.Swiss Leader vs. St Galler Kantonalbank | Swiss Leader vs. Zurich Insurance Group | Swiss Leader vs. Luzerner Kantonalbank 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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