Correlation Between Cembra Money and Zuger Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Zuger 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 Zuger 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 Zuger Kantonalbank, you can compare the effects of market volatilities on Cembra Money and Zuger 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 Zuger Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Zuger Kantonalbank.
Diversification Opportunities for Cembra Money and Zuger Kantonalbank
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cembra and Zuger is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Zuger Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zuger 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 Zuger Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zuger Kantonalbank has no effect on the direction of Cembra Money i.e., Cembra Money and Zuger Kantonalbank go up and down completely randomly.
Pair Corralation between Cembra Money and Zuger Kantonalbank
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 1.68 times more return on investment than Zuger Kantonalbank. However, Cembra Money is 1.68 times more volatile than Zuger Kantonalbank. It trades about 0.04 of its potential returns per unit of risk. Zuger Kantonalbank is currently generating about 0.06 per unit of risk. If you would invest 6,589 in Cembra Money Bank on August 28, 2024 and sell it today you would earn a total of 1,531 from holding Cembra Money Bank or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cembra Money Bank vs. Zuger Kantonalbank
Performance |
| Timeline |
| Cembra Money Bank |
| Zuger Kantonalbank |
Cembra Money and Zuger Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Zuger Kantonalbank
The main advantage of trading using opposite Cembra Money and Zuger Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Zuger 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 Zuger Kantonalbank will offset losses from the drop in Zuger Kantonalbank's long position.| Cembra Money vs. Banque Cantonale | Cembra Money vs. St Galler Kantonalbank | Cembra Money vs. PSP Swiss Property | Cembra Money vs. Berner Kantonalbank AG |
| Zuger Kantonalbank vs. Banque Cantonale | Zuger Kantonalbank vs. St Galler Kantonalbank | Zuger Kantonalbank vs. PSP Swiss Property | Zuger Kantonalbank vs. Berner Kantonalbank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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