Correlation Between Global Net and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Global Net and Berner Kantonalbank 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 Global Net and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Berner Kantonalbank AG, you can compare the effects of market volatilities on Global Net and Berner Kantonalbank 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 Global Net with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Berner Kantonalbank.
Diversification Opportunities for Global Net and Berner Kantonalbank
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Berner is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Global Net 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 Global Net Lease are associated (or correlated) with Berner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berner Kantonalbank has no effect on the direction of Global Net i.e., Global Net and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Global Net and Berner Kantonalbank
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Berner Kantonalbank. In addition to that, Global Net is 3.02 times more volatile than Berner Kantonalbank AG. It trades about -0.06 of its total potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.09 per unit of volatility. If you would invest 23,100 in Berner Kantonalbank AG on October 24, 2024 and sell it today you would earn a total of 1,100 from holding Berner Kantonalbank AG or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Global Net Lease vs. Berner Kantonalbank AG
Performance |
| Timeline |
| Global Net Lease |
| Berner Kantonalbank |
Global Net and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Berner Kantonalbank
The main advantage of trading using opposite Global Net and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Berner Kantonalbank 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 Berner Kantonalbank will offset losses from the drop in Berner Kantonalbank's long position.| Global Net vs. Allianz Technology Trust | Global Net vs. Planet Fitness Cl | Global Net vs. Infineon Technologies AG | Global Net vs. Nordic Semiconductor ASA |
| Berner Kantonalbank vs. Hecla Mining Co | Berner Kantonalbank vs. Blackrock World Mining | Berner Kantonalbank vs. Global Net Lease | Berner Kantonalbank vs. Baker Steel Resources |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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