Correlation Between Basler Kantonalbank and St Galler
Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and St Galler 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 St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basler Kantonalbank and St Galler Kantonalbank, you can compare the effects of market volatilities on Basler Kantonalbank and St Galler 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 St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and St Galler.
Diversification Opportunities for Basler Kantonalbank and St Galler
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Basler and SGKN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and St Galler go up and down completely randomly.
Pair Corralation between Basler Kantonalbank and St Galler
Assuming the 90 days trading horizon Basler Kantonalbank is expected to generate 0.95 times more return on investment than St Galler. However, Basler Kantonalbank is 1.05 times less risky than St Galler. It trades about -0.03 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.18 per unit of risk. If you would invest 6,660 in Basler Kantonalbank on August 29, 2024 and sell it today you would lose (20.00) from holding Basler Kantonalbank or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basler Kantonalbank vs. St Galler Kantonalbank
Performance |
| Timeline |
| Basler Kantonalbank |
| St Galler Kantonalbank |
Basler Kantonalbank and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basler Kantonalbank and St Galler
The main advantage of trading using opposite Basler Kantonalbank and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler'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 |
| St Galler vs. Banque Cantonale | St Galler vs. Luzerner Kantonalbank AG | St Galler vs. Berner Kantonalbank AG | St Galler vs. Helvetia Holding 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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