Correlation Between Baloise Holding and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Vanguard FTSE 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 Vanguard FTSE 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 Vanguard FTSE Developed, you can compare the effects of market volatilities on Baloise Holding and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Vanguard FTSE.
Diversification Opportunities for Baloise Holding and Vanguard FTSE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baloise and Vanguard is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of Baloise Holding i.e., Baloise Holding and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Baloise Holding and Vanguard FTSE
Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the Vanguard FTSE. But the stock apears to be less risky and, when comparing its historical volatility, Baloise Holding AG is 1.46 times less risky than Vanguard FTSE. The stock trades about -0.03 of its potential returns per unit of risk. The Vanguard FTSE Developed is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,260 in Vanguard FTSE Developed on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Vanguard FTSE Developed or generate 0.44% 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. Vanguard FTSE Developed
Performance |
| Timeline |
| Baloise Holding AG |
| Vanguard FTSE Developed |
Baloise Holding and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and Vanguard FTSE
The main advantage of trading using opposite Baloise Holding and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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