Correlation Between Visa and Baloise Swiss
Can any of the company-specific risk be diversified away by investing in both Visa and Baloise Swiss 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 Visa and Baloise Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Baloise Swiss Property, you can compare the effects of market volatilities on Visa and Baloise Swiss 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 Visa with a short position of Baloise Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Baloise Swiss.
Diversification Opportunities for Visa and Baloise Swiss
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Baloise is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Baloise Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Swiss Property and Visa 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 Visa Class A are associated (or correlated) with Baloise Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Swiss Property has no effect on the direction of Visa i.e., Visa and Baloise Swiss go up and down completely randomly.
Pair Corralation between Visa and Baloise Swiss
Taking into account the 90-day investment horizon Visa is expected to generate 3.34 times less return on investment than Baloise Swiss. But when comparing it to its historical volatility, Visa Class A is 1.1 times less risky than Baloise Swiss. It trades about 0.13 of its potential returns per unit of risk. Baloise Swiss Property is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 11,850 in Baloise Swiss Property on September 19, 2024 and sell it today you would earn a total of 850.00 from holding Baloise Swiss Property or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Baloise Swiss Property
Performance |
| Timeline |
| Visa Class A |
| Baloise Swiss Property |
Visa and Baloise Swiss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Baloise Swiss
The main advantage of trading using opposite Visa and Baloise Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Baloise Swiss 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 Swiss will offset losses from the drop in Baloise Swiss' long position.The idea behind Visa Class A and Baloise Swiss Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Baloise Swiss vs. SPDR Dow Jones | Baloise Swiss vs. Baloise Holding AG | Baloise Swiss vs. Banque Cantonale du | Baloise Swiss vs. 21Shares Polkadot ETP |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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