Correlation Between Swiss Life and Cembra Money

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

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

Diversification Opportunities for Swiss Life and Cembra Money

0.87

Correlation Coefficient

Swiss Life  Cembra Money

Very poor diversification

The 3 months correlation between Swiss and Cembra is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank and Swiss Life 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 Life Holding are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Swiss Life i.e., Swiss Life and Cembra Money go up and down completely randomly.

Pair Corralation between Swiss Life and Cembra Money

Assuming the 90 days trading horizon Swiss Life Holding is expected to generate 0.88 times more return on investment than Cembra Money. However, Swiss Life Holding is 1.14 times less risky than Cembra Money. It trades about 0.21 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.16 per unit of risk. If you would invest  75,585  in Swiss Life Holding on April 21, 2025 and sell it today you would earn a total of  7,295  from holding Swiss Life Holding or generate 9.65% return on investment over 90 days.

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

Swiss Life Holding  vs.  Cembra Money Bank

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.

Cembra Money Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cembra Money may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Swiss Life and Cembra Money

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

The idea behind Swiss Life Holding and Cembra Money Bank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.