Correlation Between Baloise Holding and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on Baloise Holding and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Zurich Insurance.
Diversification Opportunities for Baloise Holding and Zurich Insurance
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baloise and Zurich is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Baloise Holding i.e., Baloise Holding and Zurich Insurance go up and down completely randomly.
Pair Corralation between Baloise Holding and Zurich Insurance
Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the Zurich Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Baloise Holding AG is 1.13 times less risky than Zurich Insurance. The stock trades about -0.1 of its potential returns per unit of risk. The Zurich Insurance Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 52,320 in Zurich Insurance Group on October 26, 2024 and sell it today you would earn a total of 1,680 from holding Zurich Insurance Group or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baloise Holding AG vs. Zurich Insurance Group
Performance |
| Timeline |
| Baloise Holding AG |
| Zurich Insurance |
Baloise Holding and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and Zurich Insurance
The main advantage of trading using opposite Baloise Holding and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance'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 |
| Zurich Insurance vs. Swiss Re AG | Zurich Insurance vs. Novartis AG | Zurich Insurance vs. Swiss Life Holding | Zurich Insurance vs. UBS Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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