Correlation Between Baloise Holding and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Swiss Life 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 Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baloise Holding Ltd and Swiss Life Holding, you can compare the effects of market volatilities on Baloise Holding and Swiss Life 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 Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Swiss Life.
Diversification Opportunities for Baloise Holding and Swiss Life
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baloise and Swiss is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding Ltd and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Ltd are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Baloise Holding i.e., Baloise Holding and Swiss Life go up and down completely randomly.
Pair Corralation between Baloise Holding and Swiss Life
Assuming the 90 days horizon Baloise Holding Ltd is expected to generate 2.85 times more return on investment than Swiss Life. However, Baloise Holding is 2.85 times more volatile than Swiss Life Holding. It trades about -0.02 of its potential returns per unit of risk. Swiss Life Holding is currently generating about -0.25 per unit of risk. If you would invest 1,945 in Baloise Holding Ltd on August 24, 2024 and sell it today you would lose (45.00) from holding Baloise Holding Ltd or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baloise Holding Ltd vs. Swiss Life Holding
Performance |
| Timeline |
| Baloise Holding |
| Swiss Life Holding |
Baloise Holding and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baloise Holding and Swiss Life
The main advantage of trading using opposite Baloise Holding and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Zurich Insurance Group | Baloise Holding vs. Allianz SE |
| Swiss Life vs. Assicurazioni Generali SpA | Swiss Life vs. ageas SANV | Swiss Life vs. AXA SA | Swiss Life vs. Sampo OYJ |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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