Correlation Between Assicurazioni Generali and Baloise Holding

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

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

Diversification Opportunities for Assicurazioni Generali and Baloise Holding

-0.1

Correlation Coefficient

Assicurazioni Generali  Baloise Holding

Good diversification

The 3 months correlation between Assicurazioni and Baloise is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Baloise Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Holding and Assicurazioni Generali 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 Assicurazioni Generali SpA 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 has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and Baloise Holding go up and down completely randomly.

Pair Corralation between Assicurazioni Generali and Baloise Holding

Assuming the 90 days horizon Assicurazioni Generali SpA is expected to generate 0.64 times more return on investment than Baloise Holding. However, Assicurazioni Generali SpA is 1.57 times less risky than Baloise Holding. It trades about 0.04 of its potential returns per unit of risk. Baloise Holding Ltd is currently generating about 0.0 per unit of risk. If you would invest  1,445  in Assicurazioni Generali SpA on September 15, 2024 and sell it today you would earn a total of  42.00  from holding Assicurazioni Generali SpA or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Assicurazioni Generali SpA  vs.  Baloise Holding Ltd

Assicurazioni Generali

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Assicurazioni Generali is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baloise Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Assicurazioni Generali and Baloise Holding

The main advantage of trading using opposite Assicurazioni Generali and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assicurazioni Generali 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 Assicurazioni Generali SpA and Baloise Holding Ltd 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.