Correlation Between Invesco EURO and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Invesco EURO 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 Invesco EURO and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco EURO STOXX and Baloise Holding AG, you can compare the effects of market volatilities on Invesco EURO 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 Invesco EURO with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EURO and Baloise Holding.
Diversification Opportunities for Invesco EURO and Baloise Holding
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Baloise is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EURO STOXX 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 Invesco EURO 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 Invesco EURO STOXX 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 Invesco EURO i.e., Invesco EURO and Baloise Holding go up and down completely randomly.
Pair Corralation between Invesco EURO and Baloise Holding
Assuming the 90 days trading horizon Invesco EURO STOXX is expected to generate 0.78 times more return on investment than Baloise Holding. However, Invesco EURO STOXX is 1.28 times less risky than Baloise Holding. It trades about 0.08 of its potential returns per unit of risk. Baloise Holding AG is currently generating about 0.05 per unit of risk. If you would invest 9,076 in Invesco EURO STOXX on September 12, 2024 and sell it today you would earn a total of 3,358 from holding Invesco EURO STOXX or generate 37.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco EURO STOXX vs. Baloise Holding AG
Performance |
| Timeline |
| Invesco EURO STOXX |
| Baloise Holding AG |
Invesco EURO and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco EURO and Baloise Holding
The main advantage of trading using opposite Invesco EURO and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco EURO 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.| Invesco EURO vs. Baloise Holding AG | Invesco EURO vs. 21Shares Polkadot ETP | Invesco EURO vs. UBS ETF MSCI | Invesco EURO 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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