Correlation Between Xtrackers MSCI and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI China and Baloise Holding AG, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Baloise Holding.
Diversification Opportunities for Xtrackers MSCI and Baloise Holding
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and Baloise is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI China 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 Xtrackers MSCI 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 Xtrackers MSCI China 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 Xtrackers MSCI i.e., Xtrackers MSCI and Baloise Holding go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Baloise Holding
Assuming the 90 days trading horizon Xtrackers MSCI China is expected to under-perform the Baloise Holding. In addition to that, Xtrackers MSCI is 2.29 times more volatile than Baloise Holding AG. It trades about -0.08 of its total potential returns per unit of risk. Baloise Holding AG is currently generating about 0.08 per unit of volatility. If you would invest 16,410 in Baloise Holding AG on October 29, 2024 and sell it today you would earn a total of 150.00 from holding Baloise Holding AG or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Xtrackers MSCI China vs. Baloise Holding AG
Performance |
| Timeline |
| Xtrackers MSCI China |
| Baloise Holding AG |
Xtrackers MSCI and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Baloise Holding
The main advantage of trading using opposite Xtrackers MSCI and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares Core SP |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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