Correlation Between Banque Cantonale and Baloise Holding

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

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

Diversification Opportunities for Banque Cantonale and Baloise Holding

0.65

Correlation Coefficient

Banque Cantonale  Baloise Holding

Poor diversification

The 3 months correlation between Banque and Baloise is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du 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 Banque Cantonale 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 Banque Cantonale du 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 Banque Cantonale i.e., Banque Cantonale and Baloise Holding go up and down completely randomly.

Pair Corralation between Banque Cantonale and Baloise Holding

Assuming the 90 days trading horizon Banque Cantonale du is expected to under-perform the Baloise Holding. But the stock apears to be less risky and, when comparing its historical volatility, Banque Cantonale du is 1.68 times less risky than Baloise Holding. The stock trades about -0.07 of its potential returns per unit of risk. The Baloise Holding AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  16,260  in Baloise Holding AG on September 12, 2024 and sell it today you would earn a total of  140.00  from holding Baloise Holding AG or generate 0.86% return on investment over 90 days.

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

Banque Cantonale du  vs.  Baloise Holding AG

Banque Cantonale

Risk-Adjusted Performance

0 of 100

Very Weak

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

Baloise Holding AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Banque Cantonale and Baloise Holding

The main advantage of trading using opposite Banque Cantonale and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Cantonale 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.

The idea behind Banque Cantonale du and Baloise Holding AG 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.