Correlation Between Berner Kantonalbank and Hypothekarbank Lenzburg
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg AG, you can compare the effects of market volatilities on Berner Kantonalbank and Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Hypothekarbank Lenzburg.
Diversification Opportunities for Berner Kantonalbank and Hypothekarbank Lenzburg
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berner and Hypothekarbank is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Hypothekarbank Lenzburg AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypothekarbank Lenzburg has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Hypothekarbank Lenzburg go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Hypothekarbank Lenzburg
Assuming the 90 days trading horizon Berner Kantonalbank AG is expected to generate 1.1 times more return on investment than Hypothekarbank Lenzburg. However, Berner Kantonalbank is 1.1 times more volatile than Hypothekarbank Lenzburg AG. It trades about 0.04 of its potential returns per unit of risk. Hypothekarbank Lenzburg AG is currently generating about 0.0 per unit of risk. If you would invest 20,790 in Berner Kantonalbank AG on August 31, 2024 and sell it today you would earn a total of 2,410 from holding Berner Kantonalbank AG or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.19% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Hypothekarbank Lenzburg AG
Performance |
| Timeline |
| Berner Kantonalbank |
| Hypothekarbank Lenzburg |
Berner Kantonalbank and Hypothekarbank Lenzburg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Hypothekarbank Lenzburg
The main advantage of trading using opposite Berner Kantonalbank and Hypothekarbank Lenzburg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg will offset losses from the drop in Hypothekarbank Lenzburg's long position.| Berner Kantonalbank vs. Banque Cantonale | Berner Kantonalbank vs. Luzerner Kantonalbank AG | Berner Kantonalbank vs. St Galler Kantonalbank | Berner Kantonalbank vs. Basler Kantonalbank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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