Correlation Between Cembra Money and VP Bank
Can any of the company-specific risk be diversified away by investing in both Cembra Money and VP Bank 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 VP Bank 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 VP Bank AG, you can compare the effects of market volatilities on Cembra Money and VP Bank 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 VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and VP Bank.
Diversification Opportunities for Cembra Money and VP Bank
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cembra and VPBN is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG 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 VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Cembra Money i.e., Cembra Money and VP Bank go up and down completely randomly.
Pair Corralation between Cembra Money and VP Bank
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.84 times more return on investment than VP Bank. However, Cembra Money Bank is 1.19 times less risky than VP Bank. It trades about 0.05 of its potential returns per unit of risk. VP Bank AG is currently generating about -0.02 per unit of risk. If you would invest 6,640 in Cembra Money Bank on August 31, 2024 and sell it today you would earn a total of 1,470 from holding Cembra Money Bank or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cembra Money Bank vs. VP Bank AG
Performance |
| Timeline |
| Cembra Money Bank |
| VP Bank AG |
Cembra Money and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and VP Bank
The main advantage of trading using opposite Cembra Money and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank'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 |
| VP Bank vs. Swissquote Group Holding | VP Bank vs. Banque Cantonale | VP Bank vs. Barry Callebaut AG | VP Bank vs. Vontobel 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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