Correlation Between Basellandschaftliche and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Basellandschaftliche and Berner Kantonalbank 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 Basellandschaftliche and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basellandschaftliche Kantonalbank and Berner Kantonalbank AG, you can compare the effects of market volatilities on Basellandschaftliche and Berner Kantonalbank 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 Basellandschaftliche with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basellandschaftliche and Berner Kantonalbank.
Diversification Opportunities for Basellandschaftliche and Berner Kantonalbank
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Basellandschaftliche and Berner is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Basellandschaftliche Kantonalb and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Basellandschaftliche 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 Basellandschaftliche Kantonalbank are associated (or correlated) with Berner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berner Kantonalbank has no effect on the direction of Basellandschaftliche i.e., Basellandschaftliche and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Basellandschaftliche and Berner Kantonalbank
Assuming the 90 days trading horizon Basellandschaftliche is expected to generate 2.41 times less return on investment than Berner Kantonalbank. But when comparing it to its historical volatility, Basellandschaftliche Kantonalbank is 1.39 times less risky than Berner Kantonalbank. It trades about 0.03 of its potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20,928 in Berner Kantonalbank AG on December 4, 2024 and sell it today you would earn a total of 3,972 from holding Berner Kantonalbank AG or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basellandschaftliche Kantonalb vs. Berner Kantonalbank AG
Performance |
| Timeline |
| Basellandschaftliche |
| Berner Kantonalbank |
Basellandschaftliche and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basellandschaftliche and Berner Kantonalbank
The main advantage of trading using opposite Basellandschaftliche and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basellandschaftliche position performs unexpectedly, Berner Kantonalbank 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 Berner Kantonalbank will offset losses from the drop in Berner Kantonalbank's long position.| Basellandschaftliche vs. Basler Kantonalbank | ||
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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