Correlation Between IShares European and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both IShares European and Baloise Holding 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 IShares European and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares European Property and Baloise Holding AG, you can compare the effects of market volatilities on IShares European and Baloise Holding 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 IShares European with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares European and Baloise Holding.
Diversification Opportunities for IShares European and Baloise Holding
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Baloise is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares European Property and Baloise Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Holding AG and IShares European 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 iShares European Property are associated (or correlated) with Baloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Holding AG has no effect on the direction of IShares European i.e., IShares European and Baloise Holding go up and down completely randomly.
Pair Corralation between IShares European and Baloise Holding
Assuming the 90 days trading horizon IShares European is expected to generate 1.35 times less return on investment than Baloise Holding. In addition to that, IShares European is 1.35 times more volatile than Baloise Holding AG. It trades about 0.03 of its total potential returns per unit of risk. Baloise Holding AG is currently generating about 0.05 per unit of volatility. If you would invest 12,958 in Baloise Holding AG on September 14, 2024 and sell it today you would earn a total of 3,342 from holding Baloise Holding AG or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares European Property vs. Baloise Holding AG
Performance |
| Timeline |
| iShares European Property |
| Baloise Holding AG |
IShares European and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares European and Baloise Holding
The main advantage of trading using opposite IShares European and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares European position performs unexpectedly, Baloise Holding 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 Baloise Holding will offset losses from the drop in Baloise Holding's long position.| IShares European vs. Baloise Holding AG | IShares European vs. 21Shares Polkadot ETP | IShares European vs. UBS ETF MSCI | IShares European vs. BB Biotech AG |
| Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Swisscom AG | Baloise 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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