Correlation Between Helvetia Holding and Bellevue Group

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

By analyzing existing cross correlation between Helvetia Holding AG and Bellevue Group AG, you can compare the effects of market volatilities on Helvetia Holding and Bellevue Group 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 Helvetia Holding with a short position of Bellevue Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Bellevue Group.

Diversification Opportunities for Helvetia Holding and Bellevue Group

0.79

Correlation Coefficient

Helvetia Holding  Bellevue Group

Poor diversification

The 3 months correlation between Helvetia and Bellevue is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Bellevue Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Group AG and Helvetia 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 Helvetia Holding AG are associated (or correlated) with Bellevue Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Group AG has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Bellevue Group go up and down completely randomly.

Pair Corralation between Helvetia Holding and Bellevue Group

Assuming the 90 days trading horizon Helvetia Holding is expected to generate 1.5 times less return on investment than Bellevue Group. But when comparing it to its historical volatility, Helvetia Holding AG is 2.96 times less risky than Bellevue Group. It trades about 0.15 of its potential returns per unit of risk. Bellevue Group AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,210  in Bellevue Group AG on November 28, 2024 and sell it today you would earn a total of  125.00  from holding Bellevue Group AG or generate 10.33% return on investment over 90 days.

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

Helvetia Holding AG  vs.  Bellevue Group AG

Helvetia Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Bellevue Group AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Group AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bellevue Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helvetia Holding and Bellevue Group

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

The idea behind Helvetia Holding AG and Bellevue Group AG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.