Correlation Between Xtrackers Switzerland and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Xtrackers Switzerland 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 Switzerland 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 Switzerland UCITS and Baloise Holding AG, you can compare the effects of market volatilities on Xtrackers Switzerland 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 Switzerland with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Switzerland and Baloise Holding.
Diversification Opportunities for Xtrackers Switzerland and Baloise Holding
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Baloise is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Switzerland UCITS 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 Switzerland 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 Switzerland UCITS 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 Switzerland i.e., Xtrackers Switzerland and Baloise Holding go up and down completely randomly.
Pair Corralation between Xtrackers Switzerland and Baloise Holding
Assuming the 90 days trading horizon Xtrackers Switzerland is expected to generate 3.45 times less return on investment than Baloise Holding. But when comparing it to its historical volatility, Xtrackers Switzerland UCITS is 1.32 times less risky than Baloise Holding. It trades about 0.03 of its potential returns per unit of risk. Baloise Holding AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,683 in Baloise Holding AG on September 12, 2024 and sell it today you would earn a total of 3,727 from holding Baloise Holding AG or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Xtrackers Switzerland UCITS vs. Baloise Holding AG
Performance |
| Timeline |
| Xtrackers Switzerland |
| Baloise Holding AG |
Xtrackers Switzerland and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Switzerland and Baloise Holding
The main advantage of trading using opposite Xtrackers Switzerland and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Switzerland 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 Switzerland vs. Baloise Holding AG | Xtrackers Switzerland vs. 21Shares Polkadot ETP | Xtrackers Switzerland vs. UBS ETF MSCI | Xtrackers Switzerland 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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