Correlation Between Cembra Money and Basler Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Basler 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 Cembra Money and Basler Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Basler Kantonalbank, you can compare the effects of market volatilities on Cembra Money and Basler 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 Cembra Money with a short position of Basler Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Basler Kantonalbank.
Diversification Opportunities for Cembra Money and Basler Kantonalbank
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cembra and Basler is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Basler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basler Kantonalbank and Cembra Money 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 Cembra Money Bank are associated (or correlated) with Basler Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basler Kantonalbank has no effect on the direction of Cembra Money i.e., Cembra Money and Basler Kantonalbank go up and down completely randomly.
Pair Corralation between Cembra Money and Basler Kantonalbank
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 1.07 times more return on investment than Basler Kantonalbank. However, Cembra Money is 1.07 times more volatile than Basler Kantonalbank. It trades about 0.52 of its potential returns per unit of risk. Basler Kantonalbank is currently generating about 0.31 per unit of risk. If you would invest 8,180 in Cembra Money Bank on October 26, 2024 and sell it today you would earn a total of 715.00 from holding Cembra Money Bank or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. Basler Kantonalbank
Performance |
| Timeline |
| Cembra Money Bank |
| Basler Kantonalbank |
Cembra Money and Basler Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Basler Kantonalbank
The main advantage of trading using opposite Cembra Money and Basler Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Basler 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 Basler Kantonalbank will offset losses from the drop in Basler Kantonalbank's long position.| Cembra Money vs. Helvetia Holding AG | Cembra Money vs. Swiss Life Holding | Cembra Money vs. Baloise Holding AG | Cembra Money vs. Logitech International SA |
| Basler Kantonalbank vs. Banque Cantonale | Basler Kantonalbank vs. Berner Kantonalbank AG | Basler Kantonalbank vs. Luzerner Kantonalbank AG | Basler Kantonalbank vs. Banque Cantonale de |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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