Correlation Between Baloise Holding and Realstone Swiss

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Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Realstone Swiss 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 Realstone Swiss 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 Realstone Swiss Property, you can compare the effects of market volatilities on Baloise Holding and Realstone Swiss 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 Realstone Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Realstone Swiss.

Diversification Opportunities for Baloise Holding and Realstone Swiss

BaloiseRealstoneDiversified AwayBaloiseRealstoneDiversified Away100%
-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Baloise and Realstone is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Realstone Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realstone Swiss Property 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 Realstone Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realstone Swiss Property has no effect on the direction of Baloise Holding i.e., Baloise Holding and Realstone Swiss go up and down completely randomly.

Pair Corralation between Baloise Holding and Realstone Swiss

Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the Realstone Swiss. But the stock apears to be less risky and, when comparing its historical volatility, Baloise Holding AG is 1.93 times less risky than Realstone Swiss. The stock trades about -0.34 of its potential returns per unit of risk. The Realstone Swiss Property is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  13,800  in Realstone Swiss Property on September 24, 2024 and sell it today you would earn a total of  950.00  from holding Realstone Swiss Property or generate 6.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Baloise Holding AG  vs.  Realstone Swiss Property

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510
JavaScript chart by amCharts 3.21.15BALN RSF
       Timeline  
Baloise Holding AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Baloise Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Baloise Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec160162164166168170172174176
Realstone Swiss Property 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Realstone Swiss Property are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Realstone Swiss showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec130135140145

Baloise Holding and Realstone Swiss Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.23-0.91-0.59-0.27-0.03110.140.460.781.11.42 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15BALN RSF
       Returns  

Pair Trading with Baloise Holding and Realstone Swiss

The main advantage of trading using opposite Baloise Holding and Realstone Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Realstone Swiss 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 Realstone Swiss will offset losses from the drop in Realstone Swiss' long position.
The idea behind Baloise Holding AG and Realstone Swiss Property 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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