Correlation Between Baloise Holding and IShares Edge
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and IShares Edge 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 IShares Edge 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 iShares Edge MSCI, you can compare the effects of market volatilities on Baloise Holding and IShares Edge 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 IShares Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and IShares Edge.
Diversification Opportunities for Baloise Holding and IShares Edge
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baloise and IShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and iShares Edge MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Edge MSCI 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 IShares Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Edge MSCI has no effect on the direction of Baloise Holding i.e., Baloise Holding and IShares Edge go up and down completely randomly.
Pair Corralation between Baloise Holding and IShares Edge
Assuming the 90 days trading horizon Baloise Holding is expected to generate 1.51 times less return on investment than IShares Edge. In addition to that, Baloise Holding is 1.31 times more volatile than iShares Edge MSCI. It trades about 0.07 of its total potential returns per unit of risk. iShares Edge MSCI is currently generating about 0.14 per unit of volatility. If you would invest 673.00 in iShares Edge MSCI on August 30, 2024 and sell it today you would earn a total of 93.00 from holding iShares Edge MSCI or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Baloise Holding AG vs. iShares Edge MSCI
Performance |
| Timeline |
| Baloise Holding AG |
| iShares Edge MSCI |
Baloise Holding and IShares Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and IShares Edge
The main advantage of trading using opposite Baloise Holding and IShares Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, IShares Edge 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 IShares Edge will offset losses from the drop in IShares Edge'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 |
| IShares Edge vs. UBSFund Solutions MSCI | IShares Edge vs. iShares Core SP | IShares Edge vs. Baloise Holding AG | IShares Edge vs. Autoneum Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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