Correlation Between Multi Units and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Multi Units 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 Multi Units and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units Luxembourg and Baloise Holding AG, you can compare the effects of market volatilities on Multi Units 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 Multi Units with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Baloise Holding.
Diversification Opportunities for Multi Units and Baloise Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Baloise is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg 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 Multi Units 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 Multi Units Luxembourg 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 Multi Units i.e., Multi Units and Baloise Holding go up and down completely randomly.
Pair Corralation between Multi Units and Baloise Holding
Assuming the 90 days trading horizon Multi Units Luxembourg is expected to generate 1.43 times more return on investment than Baloise Holding. However, Multi Units is 1.43 times more volatile than Baloise Holding AG. It trades about 0.01 of its potential returns per unit of risk. Baloise Holding AG is currently generating about -0.07 per unit of risk. If you would invest 14,830 in Multi Units Luxembourg on September 15, 2024 and sell it today you would earn a total of 26.00 from holding Multi Units Luxembourg or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units Luxembourg vs. Baloise Holding AG
Performance |
| Timeline |
| Multi Units Luxembourg |
| Baloise Holding AG |
Multi Units and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and Baloise Holding
The main advantage of trading using opposite Multi Units and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units 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.| Multi Units vs. Baloise Holding AG | Multi Units vs. 21Shares Polkadot ETP | Multi Units vs. UBS ETF MSCI | Multi Units 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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