Correlation Between Berner Kantonalbank and Worldwide Healthcare
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Worldwide Healthcare 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 Worldwide Healthcare 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 Worldwide Healthcare Trust, you can compare the effects of market volatilities on Berner Kantonalbank and Worldwide Healthcare 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 Worldwide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Worldwide Healthcare.
Diversification Opportunities for Berner Kantonalbank and Worldwide Healthcare
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berner and Worldwide is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Worldwide Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide Healthcare 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 Worldwide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Healthcare has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Worldwide Healthcare go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Worldwide Healthcare
Assuming the 90 days trading horizon Berner Kantonalbank AG is expected to generate 0.53 times more return on investment than Worldwide Healthcare. However, Berner Kantonalbank AG is 1.9 times less risky than Worldwide Healthcare. It trades about 0.45 of its potential returns per unit of risk. Worldwide Healthcare Trust is currently generating about 0.19 per unit of risk. If you would invest 23,300 in Berner Kantonalbank AG on October 25, 2024 and sell it today you would earn a total of 1,000.00 from holding Berner Kantonalbank AG or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Worldwide Healthcare Trust
Performance |
| Timeline |
| Berner Kantonalbank |
| Worldwide Healthcare |
Berner Kantonalbank and Worldwide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Worldwide Healthcare
The main advantage of trading using opposite Berner Kantonalbank and Worldwide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Worldwide Healthcare 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 Worldwide Healthcare will offset losses from the drop in Worldwide Healthcare's long position.| Berner Kantonalbank vs. Toyota Motor Corp | Berner Kantonalbank vs. SoftBank Group Corp | Berner Kantonalbank vs. OTP Bank Nyrt | Berner Kantonalbank vs. ONEOK Inc |
| Worldwide Healthcare vs. Qurate Retail Series | Worldwide Healthcare vs. Cembra Money Bank | Worldwide Healthcare vs. Berner Kantonalbank AG | Worldwide Healthcare vs. Liechtensteinische Landesbank AG |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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