Correlation Between Baloise Holding and LG Clean
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and LG Clean 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 LG Clean 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 LG Clean Water, you can compare the effects of market volatilities on Baloise Holding and LG Clean 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 LG Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and LG Clean.
Diversification Opportunities for Baloise Holding and LG Clean
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baloise and GLUG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and LG Clean Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Clean Water 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 LG Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Clean Water has no effect on the direction of Baloise Holding i.e., Baloise Holding and LG Clean go up and down completely randomly.
Pair Corralation between Baloise Holding and LG Clean
Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 0.91 times more return on investment than LG Clean. However, Baloise Holding AG is 1.1 times less risky than LG Clean. It trades about 0.12 of its potential returns per unit of risk. LG Clean Water is currently generating about 0.06 per unit of risk. If you would invest 12,493 in Baloise Holding AG on September 25, 2024 and sell it today you would earn a total of 3,907 from holding Baloise Holding AG or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Baloise Holding AG vs. LG Clean Water
Performance |
| Timeline |
| Baloise Holding AG |
| LG Clean Water |
Baloise Holding and LG Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and LG Clean
The main advantage of trading using opposite Baloise Holding and LG Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, LG Clean 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 LG Clean will offset losses from the drop in LG Clean's long position.| Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Adecco Group AG |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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