Correlation Between Baloise Holding and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI China, you can compare the effects of market volatilities on Baloise Holding and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Xtrackers MSCI.
Diversification Opportunities for Baloise Holding and Xtrackers MSCI
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baloise and Xtrackers is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Xtrackers MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI China 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI China has no effect on the direction of Baloise Holding i.e., Baloise Holding and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Baloise Holding and Xtrackers MSCI
Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the Xtrackers MSCI. But the stock apears to be less risky and, when comparing its historical volatility, Baloise Holding AG is 2.89 times less risky than Xtrackers MSCI. The stock trades about 0.0 of its potential returns per unit of risk. The Xtrackers MSCI China is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Xtrackers MSCI China on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Xtrackers MSCI China or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baloise Holding AG vs. Xtrackers MSCI China
Performance |
| Timeline |
| Baloise Holding AG |
| Xtrackers MSCI China |
Baloise Holding and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and Xtrackers MSCI
The main advantage of trading using opposite Baloise Holding and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| Baloise Holding vs. Swiss Re AG | Baloise Holding vs. Novartis AG | Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. UBS Group AG |
| Xtrackers MSCI vs. Xtrackers MSCI USA | Xtrackers MSCI vs. Xtrackers USD Corporate | Xtrackers MSCI vs. Xtrackers MSCI AC | Xtrackers MSCI vs. Xtrackers MSCI World |
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 Stocks Directory module to find actively traded stocks across global markets.
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