Correlation Between Basellandschaftliche and Xlife Sciences
Can any of the company-specific risk be diversified away by investing in both Basellandschaftliche and Xlife Sciences 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 Xlife Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basellandschaftliche Kantonalbank and Xlife Sciences AG, you can compare the effects of market volatilities on Basellandschaftliche and Xlife Sciences 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 Xlife Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basellandschaftliche and Xlife Sciences.
Diversification Opportunities for Basellandschaftliche and Xlife Sciences
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Basellandschaftliche and Xlife is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Basellandschaftliche Kantonalb and Xlife Sciences AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xlife Sciences AG 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 Xlife Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xlife Sciences AG has no effect on the direction of Basellandschaftliche i.e., Basellandschaftliche and Xlife Sciences go up and down completely randomly.
Pair Corralation between Basellandschaftliche and Xlife Sciences
Assuming the 90 days trading horizon Basellandschaftliche is expected to generate 9.94 times less return on investment than Xlife Sciences. But when comparing it to its historical volatility, Basellandschaftliche Kantonalbank is 8.96 times less risky than Xlife Sciences. It trades about 0.01 of its potential returns per unit of risk. Xlife Sciences AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,890 in Xlife Sciences AG on September 13, 2024 and sell it today you would lose (310.00) from holding Xlife Sciences AG or give up 10.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Basellandschaftliche Kantonalb vs. Xlife Sciences AG
Performance |
| Timeline |
| Basellandschaftliche |
| Xlife Sciences AG |
Basellandschaftliche and Xlife Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basellandschaftliche and Xlife Sciences
The main advantage of trading using opposite Basellandschaftliche and Xlife Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basellandschaftliche position performs unexpectedly, Xlife Sciences 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 Xlife Sciences will offset losses from the drop in Xlife Sciences' long position.| Basellandschaftliche vs. Basler Kantonalbank | Basellandschaftliche vs. Berner Kantonalbank AG | Basellandschaftliche vs. Luzerner Kantonalbank AG | Basellandschaftliche vs. Banque Cantonale |
| Xlife Sciences vs. Metall Zug AG | Xlife Sciences vs. Cembra Money Bank | Xlife Sciences vs. BB Biotech AG | Xlife Sciences vs. Basellandschaftliche 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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