Correlation Between Baloise Holding and Sulzer AG

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

Diversification Opportunities for Baloise Holding and Sulzer AG

0.58

Correlation Coefficient

Baloise Holding  Sulzer AG

Very weak diversification

The 3 months correlation between Baloise and Sulzer is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG 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 Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Baloise Holding i.e., Baloise Holding and Sulzer AG go up and down completely randomly.

Pair Corralation between Baloise Holding and Sulzer AG

Assuming the 90 days trading horizon Baloise Holding is expected to generate 1.29 times less return on investment than Sulzer AG. But when comparing it to its historical volatility, Baloise Holding AG is 1.28 times less risky than Sulzer AG. It trades about 0.11 of its potential returns per unit of risk. Sulzer AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  13,700  in Sulzer AG on April 23, 2025 and sell it today you would earn a total of  1,320  from holding Sulzer AG or generate 9.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Baloise Holding AG  vs.  Sulzer AG

Baloise Holding AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Holding AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Baloise Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sulzer AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sulzer AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sulzer AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Baloise Holding and Sulzer AG

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

The idea behind Baloise Holding AG and Sulzer 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.