Correlation Between Baloise Swiss and Swissinvest Real

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

Diversification Opportunities for Baloise Swiss and Swissinvest Real

0.48

Correlation Coefficient

Baloise Swiss  Swissinvest Real

Very weak diversification

The 3 months correlation between Baloise and Swissinvest is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Swiss Property and Swissinvest Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swissinvest Real Estate 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 Swissinvest Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swissinvest Real Estate has no effect on the direction of Baloise Swiss i.e., Baloise Swiss and Swissinvest Real go up and down completely randomly.

Pair Corralation between Baloise Swiss and Swissinvest Real

Assuming the 90 days trading horizon Baloise Swiss is expected to generate 7.75 times less return on investment than Swissinvest Real. But when comparing it to its historical volatility, Baloise Swiss Property is 1.22 times less risky than Swissinvest Real. It trades about 0.0 of its potential returns per unit of risk. Swissinvest Real Estate is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  18,690  in Swissinvest Real Estate on September 27, 2024 and sell it today you would earn a total of  1,910  from holding Swissinvest Real Estate or generate 10.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Baloise Swiss Property  vs.  Swissinvest Real Estate

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.

Swissinvest Real Estate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swissinvest Real Estate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Swissinvest Real 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 Swiss and Swissinvest Real

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

The idea behind Baloise Swiss Property and Swissinvest Real Estate 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.