Correlation Between Baloise Holding and Vanguard USD

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

Diversification Opportunities for Baloise Holding and Vanguard USD

-0.08

Correlation Coefficient

Baloise Holding  Vanguard USD

Good diversification

The 3 months correlation between Baloise and Vanguard is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Vanguard USD Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard USD Emerging 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 Vanguard USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard USD Emerging has no effect on the direction of Baloise Holding i.e., Baloise Holding and Vanguard USD go up and down completely randomly.

Pair Corralation between Baloise Holding and Vanguard USD

Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 2.35 times more return on investment than Vanguard USD. However, Baloise Holding is 2.35 times more volatile than Vanguard USD Emerging. It trades about 0.18 of its potential returns per unit of risk. Vanguard USD Emerging is currently generating about 0.03 per unit of risk. If you would invest  16,460  in Baloise Holding AG on December 25, 2024 and sell it today you would earn a total of  1,660  from holding Baloise Holding AG or generate 10.09% 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.  Vanguard USD Emerging

Baloise Holding AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Holding AG are ranked lower than 14 (%) 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.

Vanguard USD Emerging

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard USD Emerging are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Vanguard USD is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Baloise Holding and Vanguard USD

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

The idea behind Baloise Holding AG and Vanguard USD Emerging 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.