Correlation Between St Galler and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both St Galler and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on St Galler and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Litigation Capital.
Diversification Opportunities for St Galler and Litigation Capital
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0QQZ and Litigation is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of St Galler i.e., St Galler and Litigation Capital go up and down completely randomly.
Pair Corralation between St Galler and Litigation Capital
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.45 times more return on investment than Litigation Capital. However, St Galler Kantonalbank is 2.24 times less risky than Litigation Capital. It trades about 0.34 of its potential returns per unit of risk. Litigation Capital Management is currently generating about -0.08 per unit of risk. If you would invest 43,050 in St Galler Kantonalbank on October 14, 2024 and sell it today you would earn a total of 2,050 from holding St Galler Kantonalbank or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Litigation Capital Management
Performance |
| Timeline |
| St Galler Kantonalbank |
| Litigation Capital |
St Galler and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Litigation Capital
The main advantage of trading using opposite St Galler and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| St Galler vs. Host Hotels Resorts | St Galler vs. InterContinental Hotels Group | St Galler vs. Moneta Money Bank | St Galler vs. Sydbank |
| Litigation Capital vs. Bellevue Healthcare Trust | Litigation Capital vs. Erste Group Bank | Litigation Capital vs. St Galler Kantonalbank | Litigation Capital vs. Ameriprise Financial |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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