Correlation Between Baloise Holding and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI Europe, you can compare the effects of market volatilities on Baloise Holding and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and SPDR MSCI.
Diversification Opportunities for Baloise Holding and SPDR MSCI
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baloise and SPDR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Baloise Holding i.e., Baloise Holding and SPDR MSCI go up and down completely randomly.
Pair Corralation between Baloise Holding and SPDR MSCI
Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 1.03 times more return on investment than SPDR MSCI. However, Baloise Holding is 1.03 times more volatile than SPDR MSCI Europe. It trades about 0.05 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about 0.03 per unit of risk. If you would invest 12,958 in Baloise Holding AG on September 14, 2024 and sell it today you would earn a total of 3,452 from holding Baloise Holding AG or generate 26.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Baloise Holding AG vs. SPDR MSCI Europe
Performance |
Timeline |
Baloise Holding AG |
SPDR MSCI Europe |
Baloise Holding and SPDR MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baloise Holding and SPDR MSCI
The main advantage of trading using opposite Baloise Holding and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Swisscom AG | Baloise Holding vs. Zurich Insurance Group |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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