Correlation Between Baloise Holding and Swisscom
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Swisscom 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 Swisscom 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 Swisscom AG, you can compare the effects of market volatilities on Baloise Holding and Swisscom 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 Swisscom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Swisscom.
Diversification Opportunities for Baloise Holding and Swisscom
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baloise and Swisscom is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Swisscom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swisscom AG 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 Swisscom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swisscom AG has no effect on the direction of Baloise Holding i.e., Baloise Holding and Swisscom go up and down completely randomly.
Pair Corralation between Baloise Holding and Swisscom
Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the Swisscom. In addition to that, Baloise Holding is 1.02 times more volatile than Swisscom AG. It trades about -0.03 of its total potential returns per unit of risk. Swisscom AG is currently generating about 0.14 per unit of volatility. If you would invest 50,400 in Swisscom AG on November 5, 2024 and sell it today you would earn a total of 950.00 from holding Swisscom AG or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baloise Holding AG vs. Swisscom AG
Performance |
| Timeline |
| Baloise Holding AG |
| Swisscom AG |
Baloise Holding and Swisscom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and Swisscom
The main advantage of trading using opposite Baloise Holding and Swisscom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Swisscom 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 Swisscom will offset losses from the drop in Swisscom'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 |
| Swisscom vs. Swiss Life Holding | Swisscom vs. Zurich Insurance Group | Swisscom vs. Swiss Re AG | Swisscom vs. ABB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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