Correlation Between St Galler and Central Asia
Can any of the company-specific risk be diversified away by investing in both St Galler and Central Asia 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 Central Asia 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 Central Asia Metals, you can compare the effects of market volatilities on St Galler and Central Asia 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 Central Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Central Asia.
Diversification Opportunities for St Galler and Central Asia
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0QQZ and Central is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Central Asia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Asia Metals 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 Central Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Asia Metals has no effect on the direction of St Galler i.e., St Galler and Central Asia go up and down completely randomly.
Pair Corralation between St Galler and Central Asia
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.43 times more return on investment than Central Asia. However, St Galler Kantonalbank is 2.35 times less risky than Central Asia. It trades about 0.12 of its potential returns per unit of risk. Central Asia Metals is currently generating about -0.06 per unit of risk. If you would invest 41,700 in St Galler Kantonalbank on November 2, 2024 and sell it today you would earn a total of 3,650 from holding St Galler Kantonalbank or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Central Asia Metals
Performance |
| Timeline |
| St Galler Kantonalbank |
| Central Asia Metals |
St Galler and Central Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Central Asia
The main advantage of trading using opposite St Galler and Central Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Central Asia 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 Central Asia will offset losses from the drop in Central Asia's long position.| St Galler vs. Berkshire Hathaway | St Galler vs. Samsung Electronics Co | St Galler vs. Samsung Electronics Co | St Galler vs. Chocoladefabriken Lindt Spruengli |
| Central Asia vs. Givaudan SA | Central Asia vs. Antofagasta PLC | Central Asia vs. Ferrexpo PLC | Central Asia vs. Atalaya Mining |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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