Correlation Between Basler Kantonalbank and Logitech International
Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and Logitech International 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 Basler Kantonalbank and Logitech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basler Kantonalbank and Logitech International SA, you can compare the effects of market volatilities on Basler Kantonalbank and Logitech International 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 Basler Kantonalbank with a short position of Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and Logitech International.
Diversification Opportunities for Basler Kantonalbank and Logitech International
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Basler and Logitech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International and Basler 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 Basler Kantonalbank are associated (or correlated) with Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and Logitech International go up and down completely randomly.
Pair Corralation between Basler Kantonalbank and Logitech International
Assuming the 90 days trading horizon Basler Kantonalbank is expected to under-perform the Logitech International. But the stock apears to be less risky and, when comparing its historical volatility, Basler Kantonalbank is 5.11 times less risky than Logitech International. The stock trades about -0.03 of its potential returns per unit of risk. The Logitech International SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,224 in Logitech International SA on August 29, 2024 and sell it today you would lose (26.00) from holding Logitech International SA or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Basler Kantonalbank vs. Logitech International SA
Performance |
| Timeline |
| Basler Kantonalbank |
| Logitech International |
Basler Kantonalbank and Logitech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basler Kantonalbank and Logitech International
The main advantage of trading using opposite Basler Kantonalbank and Logitech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, Logitech International 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 Logitech International will offset losses from the drop in Logitech International's long position.| Basler Kantonalbank vs. Banque Cantonale | Basler Kantonalbank vs. Berner Kantonalbank AG | Basler Kantonalbank vs. Luzerner Kantonalbank AG | Basler Kantonalbank vs. Banque Cantonale de |
| Logitech International vs. Geberit AG | Logitech International vs. Sika AG | Logitech International vs. Lonza Group AG | Logitech International vs. Swiss Life Holding |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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