Correlation Between Basellandschaftliche and Berner Kantonalbank

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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

BasellandschaftlicheBernerDiversified AwayBasellandschaftlicheBernerDiversified Away100%
0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Basellandschaftliche and Berner is 0.85. 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 Kantonalbank is expected to generate 0.91 times more return on investment than Berner Kantonalbank. However, Basellandschaftliche Kantonalbank is 1.1 times less risky than Berner Kantonalbank. It trades about 0.27 of its potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.25 per unit of risk. If you would invest  85,400  in Basellandschaftliche Kantonalbank on December 3, 2024 and sell it today you would earn a total of  6,600  from holding Basellandschaftliche Kantonalbank or generate 7.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.33%
ValuesDaily Returns

Basellandschaftliche Kantonalb  vs.  Berner Kantonalbank AG

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -7-6-5-4-3-2-1
JavaScript chart by amCharts 3.21.15BLKB BEKN
       Timeline  
Basellandschaftliche 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Basellandschaftliche Kantonalbank are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Basellandschaftliche may actually be approaching a critical reversion point that can send shares even higher in April 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar850860870880890900910920
Berner Kantonalbank 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Berner Kantonalbank AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Berner Kantonalbank may actually be approaching a critical reversion point that can send shares even higher in April 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar230235240245

Basellandschaftliche and Berner Kantonalbank Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.35-0.97-0.59-0.210.05330.410.791.171.551.93 0.51.01.5
JavaScript chart by amCharts 3.21.15BLKB BEKN
       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.
The idea behind Basellandschaftliche Kantonalbank and Berner Kantonalbank AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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