Correlation Between Swiss Life and Baloise Holding

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

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

Diversification Opportunities for Swiss Life and Baloise Holding

0.2

Correlation Coefficient

Swiss Life  Baloise Holding

Modest diversification

The 3 months correlation between Swiss and Baloise is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Baloise Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Holding and Swiss Life 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 Swiss Life Holding are associated (or correlated) with Baloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Holding has no effect on the direction of Swiss Life i.e., Swiss Life and Baloise Holding go up and down completely randomly.

Pair Corralation between Swiss Life and Baloise Holding

If you would invest  1,900  in Baloise Holding Ltd on October 20, 2024 and sell it today you would earn a total of  0.00  from holding Baloise Holding Ltd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Swiss Life Holding  vs.  Baloise Holding Ltd

Swiss Life Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiss Life Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Baloise Holding

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Swiss Life and Baloise Holding

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

The idea behind Swiss Life Holding and Baloise Holding Ltd 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.