Correlation Between Baloise Holding and UBSFund Solutions

Can any of the company-specific risk be diversified away by investing in both Baloise Holding and UBSFund Solutions 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 Baloise Holding and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baloise Holding AG and UBSFund Solutions MSCI, you can compare the effects of market volatilities on Baloise Holding and UBSFund Solutions 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 Baloise Holding with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and UBSFund Solutions.

Diversification Opportunities for Baloise Holding and UBSFund Solutions

0.41

Correlation Coefficient

Baloise Holding  UBSFund Solutions

Very weak diversification

The 3 months correlation between Baloise and UBSFund is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Baloise Holding 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 Baloise Holding AG are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Baloise Holding i.e., Baloise Holding and UBSFund Solutions go up and down completely randomly.

Pair Corralation between Baloise Holding and UBSFund Solutions

Assuming the 90 days trading horizon Baloise Holding AG is expected to under-perform the UBSFund Solutions. In addition to that, Baloise Holding is 1.27 times more volatile than UBSFund Solutions MSCI. It trades about -0.08 of its total potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.11 per unit of volatility. If you would invest  2,659  in UBSFund Solutions MSCI on September 14, 2024 and sell it today you would earn a total of  111.00  from holding UBSFund Solutions MSCI or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Baloise Holding AG  vs.  UBSFund Solutions MSCI

Baloise Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baloise Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Baloise Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

UBSFund Solutions MSCI

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBSFund Solutions MSCI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UBSFund Solutions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Baloise Holding and UBSFund Solutions

The main advantage of trading using opposite Baloise Holding and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.

The idea behind Baloise Holding AG and UBSFund Solutions MSCI 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.

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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.