Correlation Between Baloise Holding and Assicurazioni Generali

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

By analyzing existing cross correlation between Baloise Holding Ltd and Assicurazioni Generali SpA, you can compare the effects of market volatilities on Baloise Holding and Assicurazioni Generali 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 Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Assicurazioni Generali.

Diversification Opportunities for Baloise Holding and Assicurazioni Generali

0.0

Correlation Coefficient

Baloise Holding  Assicurazioni Generali

Pay attention - limited upside

The 3 months correlation between Baloise and Assicurazioni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding Ltd and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali 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 Ltd are associated (or correlated) with Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Baloise Holding i.e., Baloise Holding and Assicurazioni Generali go up and down completely randomly.

Pair Corralation between Baloise Holding and Assicurazioni Generali

If you would invest  2,758  in Assicurazioni Generali SpA on December 4, 2024 and sell it today you would earn a total of  583.00  from holding Assicurazioni Generali SpA or generate 21.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Baloise Holding Ltd  vs.  Assicurazioni Generali SpA

Baloise Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baloise Holding Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Baloise Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Assicurazioni Generali

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Assicurazioni Generali reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baloise Holding and Assicurazioni Generali

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

The idea behind Baloise Holding Ltd and Assicurazioni Generali SpA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.