Correlation Between Baloise Holding and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and SPDR Dow 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 SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baloise Holding AG and SPDR Dow Jones, you can compare the effects of market volatilities on Baloise Holding and SPDR Dow 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 SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and SPDR Dow.
Diversification Opportunities for Baloise Holding and SPDR Dow
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baloise and SPDR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones 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 AG are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of Baloise Holding i.e., Baloise Holding and SPDR Dow go up and down completely randomly.
Pair Corralation between Baloise Holding and SPDR Dow
Assuming the 90 days trading horizon Baloise Holding is expected to generate 2.36 times less return on investment than SPDR Dow. But when comparing it to its historical volatility, Baloise Holding AG is 1.26 times less risky than SPDR Dow. It trades about 0.08 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,725 in SPDR Dow Jones on October 29, 2024 and sell it today you would earn a total of 38.00 from holding SPDR Dow Jones or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baloise Holding AG vs. SPDR Dow Jones
Performance |
| Timeline |
| Baloise Holding AG |
| SPDR Dow Jones |
Baloise Holding and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and SPDR Dow
The main advantage of trading using opposite Baloise Holding and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Swisscom AG | Baloise Holding vs. Zurich Insurance Group |
| SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR SP Utilities | SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR MSCI EM |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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