Correlation Between Berner Kantonalbank and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Liechtensteinische 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 Liechtensteinische 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 Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Berner Kantonalbank and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Liechtensteinische.
Diversification Opportunities for Berner Kantonalbank and Liechtensteinische
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berner and Liechtensteinische is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Liechtensteinische go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Liechtensteinische
Assuming the 90 days trading horizon Berner Kantonalbank AG is expected to generate 0.8 times more return on investment than Liechtensteinische. However, Berner Kantonalbank AG is 1.26 times less risky than Liechtensteinische. It trades about -0.04 of its potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about -0.17 per unit of risk. If you would invest 23,400 in Berner Kantonalbank AG on August 27, 2024 and sell it today you would lose (100.00) from holding Berner Kantonalbank AG or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Berner Kantonalbank |
| Liechtensteinische |
Berner Kantonalbank and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Liechtensteinische
The main advantage of trading using opposite Berner Kantonalbank and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische'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 |
| Liechtensteinische vs. VP Bank AG | Liechtensteinische vs. Valiant Holding AG | Liechtensteinische vs. Glarner Kantonalbank | Liechtensteinische vs. Berner Kantonalbank 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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