Correlation Between Berner Kantonalbank and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Monks Investment 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 Berner Kantonalbank and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berner Kantonalbank AG and Monks Investment Trust, you can compare the effects of market volatilities on Berner Kantonalbank and Monks Investment 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 Berner Kantonalbank with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Monks Investment.
Diversification Opportunities for Berner Kantonalbank and Monks Investment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Berner and Monks is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust and Berner Kantonalbank 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 Berner Kantonalbank AG are associated (or correlated) with Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Monks Investment go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Monks Investment
Assuming the 90 days trading horizon Berner Kantonalbank is expected to generate 1.73 times less return on investment than Monks Investment. But when comparing it to its historical volatility, Berner Kantonalbank AG is 1.77 times less risky than Monks Investment. It trades about 0.38 of its potential returns per unit of risk. Monks Investment Trust is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 125,400 in Monks Investment Trust on October 28, 2024 and sell it today you would earn a total of 8,400 from holding Monks Investment Trust or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Monks Investment Trust
Performance |
| Timeline |
| Berner Kantonalbank |
| Monks Investment Trust |
Berner Kantonalbank and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Monks Investment
The main advantage of trading using opposite Berner Kantonalbank and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.| Berner Kantonalbank vs. Berkshire Hathaway | Berner Kantonalbank vs. Samsung Electronics Co | Berner Kantonalbank vs. Samsung Electronics Co | Berner Kantonalbank vs. Chocoladefabriken Lindt Spruengli |
| Monks Investment vs. Metals Exploration Plc | Monks Investment vs. Electronic Arts | Monks Investment vs. Compal Electronics GDR | Monks Investment vs. Thor Mining PLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |