Correlation Between St Galler and Baker Steel
Can any of the company-specific risk be diversified away by investing in both St Galler and Baker Steel 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 St Galler and Baker Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Baker Steel Resources, you can compare the effects of market volatilities on St Galler and Baker Steel 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 St Galler with a short position of Baker Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Baker Steel.
Diversification Opportunities for St Galler and Baker Steel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QQZ and Baker is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Baker Steel Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Steel Resources and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Baker Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Steel Resources has no effect on the direction of St Galler i.e., St Galler and Baker Steel go up and down completely randomly.
Pair Corralation between St Galler and Baker Steel
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to under-perform the Baker Steel. But the stock apears to be less risky and, when comparing its historical volatility, St Galler Kantonalbank is 6.99 times less risky than Baker Steel. The stock trades about -0.04 of its potential returns per unit of risk. The Baker Steel Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,470 in Baker Steel Resources on November 5, 2024 and sell it today you would earn a total of 1,180 from holding Baker Steel Resources or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Baker Steel Resources
Performance |
| Timeline |
| St Galler Kantonalbank |
| Baker Steel Resources |
St Galler and Baker Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Baker Steel
The main advantage of trading using opposite St Galler and Baker Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Baker Steel 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 Baker Steel will offset losses from the drop in Baker Steel's long position.| St Galler vs. Datalogic | St Galler vs. First Majestic Silver | St Galler vs. Thor Mining PLC | St Galler vs. Griffin Mining |
| Baker Steel vs. Adriatic Metals | Baker Steel vs. Eastinco Mining Exploration | Baker Steel vs. Medical Properties Trust | Baker Steel vs. LPKF Laser Electronics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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