Correlation Between Baloise Holding and HSBC Hang
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and HSBC Hang 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 HSBC Hang 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 HSBC Hang Seng, you can compare the effects of market volatilities on Baloise Holding and HSBC Hang 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 HSBC Hang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and HSBC Hang.
Diversification Opportunities for Baloise Holding and HSBC Hang
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baloise and HSBC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and HSBC Hang Seng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Hang Seng 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 HSBC Hang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Hang Seng has no effect on the direction of Baloise Holding i.e., Baloise Holding and HSBC Hang go up and down completely randomly.
Pair Corralation between Baloise Holding and HSBC Hang
Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the HSBC Hang. But the stock apears to be less risky and, when comparing its historical volatility, Baloise Holding AG is 5.11 times less risky than HSBC Hang. The stock trades about -0.1 of its potential returns per unit of risk. The HSBC Hang Seng is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 621.00 in HSBC Hang Seng on September 13, 2024 and sell it today you would earn a total of 18.00 from holding HSBC Hang Seng or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Baloise Holding AG vs. HSBC Hang Seng
Performance |
| Timeline |
| Baloise Holding AG |
| HSBC Hang Seng |
Baloise Holding and HSBC Hang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and HSBC Hang
The main advantage of trading using opposite Baloise Holding and HSBC Hang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, HSBC Hang 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 HSBC Hang will offset losses from the drop in HSBC Hang'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 |
| HSBC Hang vs. Baloise Holding AG | HSBC Hang vs. 21Shares Polkadot ETP | HSBC Hang vs. UBS ETF MSCI | HSBC Hang vs. BB Biotech AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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