Correlation Between Basellandschaftliche and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Basellandschaftliche 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 Basellandschaftliche and Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basellandschaftliche Kantonalbank and Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Basellandschaftliche 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 Basellandschaftliche with a short position of Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basellandschaftliche and Liechtensteinische.
Diversification Opportunities for Basellandschaftliche and Liechtensteinische
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basellandschaftliche and Liechtensteinische is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Basellandschaftliche Kantonalb and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 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 Basellandschaftliche i.e., Basellandschaftliche and Liechtensteinische go up and down completely randomly.
Pair Corralation between Basellandschaftliche and Liechtensteinische
Assuming the 90 days trading horizon Basellandschaftliche is expected to generate 1.65 times less return on investment than Liechtensteinische. In addition to that, Basellandschaftliche is 1.2 times more volatile than Liechtensteinische Landesbank AG. It trades about 0.29 of its total potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about 0.57 per unit of volatility. If you would invest 7,249 in Liechtensteinische Landesbank AG on February 12, 2025 and sell it today you would earn a total of 581.00 from holding Liechtensteinische Landesbank AG or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basellandschaftliche Kantonalb vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Basellandschaftliche |
| Liechtensteinische |
Basellandschaftliche and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basellandschaftliche and Liechtensteinische
The main advantage of trading using opposite Basellandschaftliche and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basellandschaftliche 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.| Basellandschaftliche vs. Basler Kantonalbank | Basellandschaftliche vs. Berner Kantonalbank AG | Basellandschaftliche vs. Luzerner Kantonalbank AG | Basellandschaftliche vs. Banque Cantonale |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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