Correlation Between Helvetia Holding and Belimo Holding

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

Diversification Opportunities for Helvetia Holding and Belimo Holding

-0.15

Correlation Coefficient

Helvetia Holding  Belimo Holding

Good diversification

The 3 months correlation between Helvetia and Belimo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding 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 Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Belimo Holding go up and down completely randomly.

Pair Corralation between Helvetia Holding and Belimo Holding

Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.67 times more return on investment than Belimo Holding. However, Helvetia Holding AG is 1.5 times less risky than Belimo Holding. It trades about 0.08 of its potential returns per unit of risk. Belimo Holding is currently generating about 0.05 per unit of risk. If you would invest  10,280  in Helvetia Holding AG on October 10, 2024 and sell it today you would earn a total of  5,210  from holding Helvetia Holding AG or generate 50.68% return on investment over 90 days.

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

Helvetia Holding AG  vs.  Belimo Holding

Helvetia Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Helvetia Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Belimo Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Belimo Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Belimo Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Helvetia Holding and Belimo Holding

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

The idea behind Helvetia Holding AG and Belimo Holding 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 Stocks Directory module to find actively traded stocks across global markets.