Correlation Between Caledonia Investments and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Caledonia Investments 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 Caledonia Investments and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Investments and Berner Kantonalbank AG, you can compare the effects of market volatilities on Caledonia Investments 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 Caledonia Investments with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Investments and Berner Kantonalbank.
Diversification Opportunities for Caledonia Investments and Berner Kantonalbank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caledonia and Berner is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Investments and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments i.e., Caledonia Investments and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Caledonia Investments and Berner Kantonalbank
Assuming the 90 days trading horizon Caledonia Investments is expected to generate 1.54 times more return on investment than Berner Kantonalbank. However, Caledonia Investments is 1.54 times more volatile than Berner Kantonalbank AG. It trades about 0.04 of its potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.02 per unit of risk. If you would invest 338,952 in Caledonia Investments on November 5, 2024 and sell it today you would earn a total of 40,548 from holding Caledonia Investments or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.79% |
| Values | Daily Returns |
Caledonia Investments vs. Berner Kantonalbank AG
Performance |
| Timeline |
| Caledonia Investments |
| Berner Kantonalbank |
Caledonia Investments and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Investments and Berner Kantonalbank
The main advantage of trading using opposite Caledonia Investments and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Investments 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.| Caledonia Investments vs. Ion Beam Applications | Caledonia Investments vs. PPHE Hotel Group | Caledonia Investments vs. Automatic Data Processing | Caledonia Investments vs. Fidelity National Information |
| Berner Kantonalbank vs. Fulcrum Metals PLC | Berner Kantonalbank vs. First Class Metals | Berner Kantonalbank vs. Charter Communications Cl | Berner Kantonalbank vs. Cairo Communication SpA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |