Correlation Between Baloise Holding and GOOD BUILDINGS
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and GOOD BUILDINGS 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 GOOD BUILDINGS 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 GOOD BUILDINGS Swiss, you can compare the effects of market volatilities on Baloise Holding and GOOD BUILDINGS 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 GOOD BUILDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and GOOD BUILDINGS.
Diversification Opportunities for Baloise Holding and GOOD BUILDINGS
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baloise and GOOD is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and GOOD BUILDINGS Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOOD BUILDINGS Swiss 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 GOOD BUILDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOOD BUILDINGS Swiss has no effect on the direction of Baloise Holding i.e., Baloise Holding and GOOD BUILDINGS go up and down completely randomly.
Pair Corralation between Baloise Holding and GOOD BUILDINGS
Assuming the 90 days trading horizon Baloise Holding is expected to generate 4.66 times less return on investment than GOOD BUILDINGS. But when comparing it to its historical volatility, Baloise Holding AG is 1.66 times less risky than GOOD BUILDINGS. It trades about 0.09 of its potential returns per unit of risk. GOOD BUILDINGS Swiss is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 15,000 in GOOD BUILDINGS Swiss on October 5, 2024 and sell it today you would earn a total of 700.00 from holding GOOD BUILDINGS Swiss or generate 4.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Baloise Holding AG vs. GOOD BUILDINGS Swiss
Performance |
Timeline |
Baloise Holding AG |
GOOD BUILDINGS Swiss |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Baloise Holding and GOOD BUILDINGS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baloise Holding and GOOD BUILDINGS
The main advantage of trading using opposite Baloise Holding and GOOD BUILDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, GOOD BUILDINGS 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 GOOD BUILDINGS will offset losses from the drop in GOOD BUILDINGS's long position.Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Zurich Insurance Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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