Correlation Between Baloise Holding and CSIF III

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

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

Diversification Opportunities for Baloise Holding and CSIF III

-0.66

Correlation Coefficient

Baloise Holding  CSIF III

Excellent diversification

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

Pair Corralation between Baloise Holding and CSIF III

Assuming the 90 days trading horizon Baloise Holding is expected to generate 1.48 times less return on investment than CSIF III. In addition to that, Baloise Holding is 1.51 times more volatile than CSIF III Eq. It trades about 0.05 of its total potential returns per unit of risk. CSIF III Eq is currently generating about 0.1 per unit of volatility. If you would invest  120,226  in CSIF III Eq on September 26, 2024 and sell it today you would earn a total of  49,205  from holding CSIF III Eq or generate 40.93% return on investment over 90 days.

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

Baloise Holding AG  vs.  CSIF III Eq

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.

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.

Pair Trading with Baloise Holding and CSIF III

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

The idea behind Baloise Holding AG and CSIF III Eq 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.