Correlation Between Baloise Holding and CS Real

Can any of the company-specific risk be diversified away by investing in both Baloise Holding and CS Real 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 CS Real 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 CS Real Estate, you can compare the effects of market volatilities on Baloise Holding and CS Real 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 CS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and CS Real.

Diversification Opportunities for Baloise Holding and CS Real

-0.27

Correlation Coefficient

Baloise Holding  CS Real

Very good diversification

The 3 months correlation between Baloise and CSLP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and CS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS Real Estate 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 CS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS Real Estate has no effect on the direction of Baloise Holding i.e., Baloise Holding and CS Real go up and down completely randomly.

Pair Corralation between Baloise Holding and CS Real

Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 0.88 times more return on investment than CS Real. However, Baloise Holding AG is 1.13 times less risky than CS Real. It trades about 0.11 of its potential returns per unit of risk. CS Real Estate is currently generating about 0.08 per unit of risk. If you would invest  12,474  in Baloise Holding AG on October 1, 2024 and sell it today you would earn a total of  3,986  from holding Baloise Holding AG or generate 31.95% return on investment over 90 days.

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

Baloise Holding AG  vs.  CS Real Estate

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.

CS Real Estate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CS Real Estate are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, CS Real 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 Baloise Holding and CS Real

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

The idea behind Baloise Holding AG and CS Real Estate 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.