Correlation Between Baloise Holding and UBS PF

Can any of the company-specific risk be diversified away by investing in both Baloise Holding and UBS PF 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 UBS PF 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 UBS PF Swiss, you can compare the effects of market volatilities on Baloise Holding and UBS PF 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 UBS PF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and UBS PF.

Diversification Opportunities for Baloise Holding and UBS PF

-0.31

Correlation Coefficient

Baloise Holding  UBS PF

Very good diversification

The 3 months correlation between Baloise and UBS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and UBS PF Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS PF 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 UBS PF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS PF Swiss has no effect on the direction of Baloise Holding i.e., Baloise Holding and UBS PF go up and down completely randomly.

Pair Corralation between Baloise Holding and UBS PF

Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 0.77 times more return on investment than UBS PF. However, Baloise Holding AG is 1.29 times less risky than UBS PF. It trades about 0.22 of its potential returns per unit of risk. UBS PF Swiss is currently generating about 0.02 per unit of risk. If you would invest  16,400  in Baloise Holding AG on December 22, 2024 and sell it today you would earn a total of  1,950  from holding Baloise Holding AG or generate 11.89% return on investment over 90 days.

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

Baloise Holding AG  vs.  UBS PF Swiss

Baloise Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Holding AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Baloise Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

UBS PF Swiss

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UBS PF Swiss are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, UBS PF is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Baloise Holding and UBS PF

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

The idea behind Baloise Holding AG and UBS PF Swiss 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.