Correlation Between Swiss Re and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both Swiss Re and Belimo 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 Swiss Re and Belimo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Re AG and Belimo Holding, you can compare the effects of market volatilities on Swiss Re and Belimo 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 Swiss Re with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Re and Belimo Holding.
Diversification Opportunities for Swiss Re and Belimo Holding
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swiss and Belimo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Re AG and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and Swiss Re 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 Swiss Re AG are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Swiss Re i.e., Swiss Re and Belimo Holding go up and down completely randomly.
Pair Corralation between Swiss Re and Belimo Holding
Assuming the 90 days trading horizon Swiss Re is expected to generate 2.74 times less return on investment than Belimo Holding. But when comparing it to its historical volatility, Swiss Re AG is 1.34 times less risky than Belimo Holding. It trades about 0.07 of its potential returns per unit of risk. Belimo Holding is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 41,940 in Belimo Holding on August 29, 2024 and sell it today you would earn a total of 16,410 from holding Belimo Holding or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Re AG vs. Belimo Holding
Performance |
| Timeline |
| Swiss Re AG |
| Belimo Holding |
Swiss Re and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Re and Belimo Holding
The main advantage of trading using opposite Swiss Re and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Re position performs unexpectedly, Belimo 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 Belimo Holding will offset losses from the drop in Belimo Holding's long position.| Swiss Re vs. Zurich Insurance Group | Swiss Re vs. Swiss Life Holding | Swiss Re vs. Novartis AG | Swiss Re vs. UBS Group AG |
| Belimo Holding vs. EMS CHEMIE HOLDING AG | Belimo Holding vs. Geberit AG | Belimo Holding vs. VAT Group AG | Belimo Holding vs. Interroll Holding 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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