Correlation Between Helvetia Holding and Galenica Sante
Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and Galenica Sante 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 Helvetia Holding and Galenica Sante into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and Galenica Sante AG, you can compare the effects of market volatilities on Helvetia Holding and Galenica Sante 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 Helvetia Holding with a short position of Galenica Sante. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Galenica Sante.
Diversification Opportunities for Helvetia Holding and Galenica Sante
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Helvetia and Galenica is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Galenica Sante AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galenica Sante AG and Helvetia 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 Helvetia Holding AG are associated (or correlated) with Galenica Sante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galenica Sante AG has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Galenica Sante go up and down completely randomly.
Pair Corralation between Helvetia Holding and Galenica Sante
Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.78 times more return on investment than Galenica Sante. However, Helvetia Holding AG is 1.28 times less risky than Galenica Sante. It trades about 0.4 of its potential returns per unit of risk. Galenica Sante AG is currently generating about 0.11 per unit of risk. If you would invest 14,620 in Helvetia Holding AG on September 1, 2024 and sell it today you would earn a total of 820.00 from holding Helvetia Holding AG or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Helvetia Holding AG vs. Galenica Sante AG
Performance |
| Timeline |
| Helvetia Holding |
| Galenica Sante AG |
Helvetia Holding and Galenica Sante Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helvetia Holding and Galenica Sante
The main advantage of trading using opposite Helvetia Holding and Galenica Sante positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, Galenica Sante 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 Galenica Sante will offset losses from the drop in Galenica Sante's long position.| Helvetia Holding vs. Swiss Life Holding | Helvetia Holding vs. Baloise Holding AG | Helvetia Holding vs. Swiss Re AG | Helvetia Holding vs. Zurich Insurance Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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