Correlation Between Swisscom and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Swisscom 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 Swisscom and Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swisscom AG and Swiss Life Holding, you can compare the effects of market volatilities on Swisscom 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 Swisscom with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swisscom and Swiss Life.
Diversification Opportunities for Swisscom and Swiss Life
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swisscom and Swiss is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Swisscom AG 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 Swisscom 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 Swisscom AG 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 Swisscom i.e., Swisscom and Swiss Life go up and down completely randomly.
Pair Corralation between Swisscom and Swiss Life
Assuming the 90 days trading horizon Swisscom is expected to generate 3.04 times less return on investment than Swiss Life. But when comparing it to its historical volatility, Swisscom AG is 1.29 times less risky than Swiss Life. It trades about 0.04 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 50,156 in Swiss Life Holding on April 28, 2025 and sell it today you would earn a total of 34,344 from holding Swiss Life Holding or generate 68.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Swisscom AG vs. Swiss Life Holding
Performance |
Timeline |
Swisscom AG |
Swiss Life Holding |
Swisscom and Swiss Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Swisscom and Swiss Life
The main advantage of trading using opposite Swisscom and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swisscom 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.Swisscom vs. Swiss Life Holding | Swisscom vs. Zurich Insurance Group | Swisscom vs. Swiss Re AG | Swisscom vs. ABB |
Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Swiss Re AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Lonza 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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