Correlation Between Baloise Swiss and BCV Swiss

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

By analyzing existing cross correlation between Baloise Swiss Property and BCV Swiss Franc, you can compare the effects of market volatilities on Baloise Swiss and BCV Swiss 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 Swiss with a short position of BCV Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Swiss and BCV Swiss.

Diversification Opportunities for Baloise Swiss and BCV Swiss

0.82

Correlation Coefficient

Baloise Swiss  BCV Swiss

Very poor diversification

The 3 months correlation between Baloise and BCV is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Swiss Property and BCV Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCV Swiss Franc and Baloise Swiss 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 Swiss Property are associated (or correlated) with BCV Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCV Swiss Franc has no effect on the direction of Baloise Swiss i.e., Baloise Swiss and BCV Swiss go up and down completely randomly.

Pair Corralation between Baloise Swiss and BCV Swiss

Assuming the 90 days trading horizon Baloise Swiss Property is expected to generate 6.82 times more return on investment than BCV Swiss. However, Baloise Swiss is 6.82 times more volatile than BCV Swiss Franc. It trades about 0.21 of its potential returns per unit of risk. BCV Swiss Franc is currently generating about 0.19 per unit of risk. If you would invest  11,600  in Baloise Swiss Property on September 26, 2024 and sell it today you would earn a total of  1,100  from holding Baloise Swiss Property or generate 9.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Baloise Swiss Property  vs.  BCV Swiss Franc

Baloise Swiss Property

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Swiss Property are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively weak basic indicators, Baloise Swiss may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BCV Swiss Franc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BCV Swiss Franc are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, BCV Swiss is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Baloise Swiss and BCV Swiss

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

The idea behind Baloise Swiss Property and BCV Swiss Franc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.