Correlation Between Aareal Bank and Schweizerische Nationalbank

Can any of the company-specific risk be diversified away by investing in both Aareal Bank and Schweizerische Nationalbank 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 Aareal Bank and Schweizerische Nationalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aareal Bank AG and Schweizerische Nationalbank, you can compare the effects of market volatilities on Aareal Bank and Schweizerische Nationalbank 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 Aareal Bank with a short position of Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aareal Bank and Schweizerische Nationalbank.

Diversification Opportunities for Aareal Bank and Schweizerische Nationalbank

0.0

Correlation Coefficient

Aareal Bank  Schweizerische Nationalbank

Pay attention - limited upside

The 3 months correlation between Aareal and Schweizerische is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aareal Bank AG and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank and Aareal Bank 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 Aareal Bank AG are associated (or correlated) with Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Aareal Bank i.e., Aareal Bank and Schweizerische Nationalbank go up and down completely randomly.

Pair Corralation between Aareal Bank and Schweizerische Nationalbank

If you would invest  440,333  in Schweizerische Nationalbank on February 5, 2024 and sell it today you would earn a total of  9,667  from holding Schweizerische Nationalbank or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aareal Bank AG  vs.  Schweizerische Nationalbank

Aareal Bank AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aareal Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Aareal Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweizerische Nationalbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Schweizerische Nationalbank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aareal Bank and Schweizerische Nationalbank

The main advantage of trading using opposite Aareal Bank and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aareal Bank position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank's long position.

The idea behind Aareal Bank AG and Schweizerische Nationalbank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.