Correlation Between CSIF III and Baloise Holding

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

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

Diversification Opportunities for CSIF III and Baloise Holding

-0.66

Correlation Coefficient

CSIF III  Baloise Holding

Excellent diversification

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

Pair Corralation between CSIF III and Baloise Holding

Assuming the 90 days trading horizon CSIF III Eq is expected to generate 0.88 times more return on investment than Baloise Holding. However, CSIF III Eq is 1.14 times less risky than Baloise Holding. It trades about 0.06 of its potential returns per unit of risk. Baloise Holding AG is currently generating about 0.04 per unit of risk. If you would invest  160,585  in CSIF III Eq on September 26, 2024 and sell it today you would earn a total of  8,846  from holding CSIF III Eq or generate 5.51% return on investment over 90 days.

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

CSIF III Eq  vs.  Baloise Holding AG

CSIF III Eq

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF III Eq are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, CSIF III is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Baloise Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CSIF III and Baloise Holding

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

The idea behind CSIF III Eq and Baloise Holding 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.