Correlation Between Adecco Group and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Adecco Group 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 Adecco Group and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group AG and Baloise Holding AG, you can compare the effects of market volatilities on Adecco Group 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 Adecco Group with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and Baloise Holding.
Diversification Opportunities for Adecco Group and Baloise Holding
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Adecco and Baloise is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG 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 Adecco Group 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 Adecco Group AG 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 Adecco Group i.e., Adecco Group and Baloise Holding go up and down completely randomly.
Pair Corralation between Adecco Group and Baloise Holding
Assuming the 90 days trading horizon Adecco Group AG is expected to under-perform the Baloise Holding. In addition to that, Adecco Group is 1.6 times more volatile than Baloise Holding AG. It trades about -0.03 of its total potential returns per unit of risk. Baloise Holding AG is currently generating about 0.05 per unit of volatility. If you would invest 13,264 in Baloise Holding AG on September 26, 2024 and sell it today you would earn a total of 3,136 from holding Baloise Holding AG or generate 23.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Adecco Group AG vs. Baloise Holding AG
Performance |
Timeline |
Adecco Group AG |
Baloise Holding AG |
Adecco Group and Baloise Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adecco Group and Baloise Holding
The main advantage of trading using opposite Adecco Group and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco Group 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.Adecco Group vs. Swisscom AG | Adecco Group vs. Swiss Life Holding | Adecco Group vs. Swiss Re AG | Adecco Group vs. ABB |
Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Adecco Group AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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