Correlation Between Swiss Life and Hubersuhner

Can any of the company-specific risk be diversified away by investing in both Swiss Life and Hubersuhner 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 Hubersuhner 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 Hubersuhner AG, you can compare the effects of market volatilities on Swiss Life and Hubersuhner 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 Hubersuhner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Hubersuhner.

Diversification Opportunities for Swiss Life and Hubersuhner

0.66

Correlation Coefficient

Swiss Life  Hubersuhner

Poor diversification

The 3 months correlation between Swiss and Hubersuhner is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Hubersuhner AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubersuhner AG 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 Hubersuhner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubersuhner AG has no effect on the direction of Swiss Life i.e., Swiss Life and Hubersuhner go up and down completely randomly.

Pair Corralation between Swiss Life and Hubersuhner

Assuming the 90 days trading horizon Swiss Life is expected to generate 2.99 times less return on investment than Hubersuhner. But when comparing it to its historical volatility, Swiss Life Holding is 1.41 times less risky than Hubersuhner. It trades about 0.18 of its potential returns per unit of risk. Hubersuhner AG is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  6,950  in Hubersuhner AG on April 24, 2025 and sell it today you would earn a total of  1,940  from holding Hubersuhner AG or generate 27.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Swiss Life Holding  vs.  Hubersuhner AG

Swiss Life Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 14 (%) 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.

Hubersuhner AG

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Hubersuhner AG are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hubersuhner showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swiss Life and Hubersuhner

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

The idea behind Swiss Life Holding and Hubersuhner AG 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.