Correlation Between Roche Holding and Swiss Life

Can any of the company-specific risk be diversified away by investing in both Roche Holding 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 Roche Holding and Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Roche Holding and Swiss Life

-0.07

Correlation Coefficient

Roche Holding  Swiss Life

Good diversification

The 3 months correlation between Roche and Swiss is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Roche Holding 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 Roche Holding 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 Roche Holding 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 Roche Holding i.e., Roche Holding and Swiss Life go up and down completely randomly.

Pair Corralation between Roche Holding and Swiss Life

Assuming the 90 days trading horizon Roche Holding AG is expected to under-perform the Swiss Life. In addition to that, Roche Holding is 1.47 times more volatile than Swiss Life Holding. It trades about 0.0 of its total potential returns per unit of risk. Swiss Life Holding is currently generating about 0.21 per unit of volatility. If you would invest  76,543  in Swiss Life Holding on April 24, 2025 and sell it today you would earn a total of  7,457  from holding Swiss Life Holding or generate 9.74% return on investment over 90 days.

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

Roche Holding AG  vs.  Swiss Life Holding

Roche Holding AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roche Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Roche Holding is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Swiss Life Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swiss Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Roche Holding and Swiss Life

The main advantage of trading using opposite Roche Holding and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roche Holding 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.

The idea behind Roche Holding AG and Swiss Life Holding 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.