Correlation Between Glarner Kantonalbank and VP Bank
Can any of the company-specific risk be diversified away by investing in both Glarner Kantonalbank 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 Glarner Kantonalbank and VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glarner Kantonalbank and VP Bank AG, you can compare the effects of market volatilities on Glarner Kantonalbank 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 Glarner Kantonalbank with a short position of VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glarner Kantonalbank and VP Bank.
Diversification Opportunities for Glarner Kantonalbank and VP Bank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glarner and VPBN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Glarner Kantonalbank 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 Glarner 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 Glarner Kantonalbank 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 Glarner Kantonalbank i.e., Glarner Kantonalbank and VP Bank go up and down completely randomly.
Pair Corralation between Glarner Kantonalbank and VP Bank
Assuming the 90 days trading horizon Glarner Kantonalbank is expected to generate 1.08 times less return on investment than VP Bank. But when comparing it to its historical volatility, Glarner Kantonalbank is 1.6 times less risky than VP Bank. It trades about 0.25 of its potential returns per unit of risk. VP Bank AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,580 in VP Bank AG on November 3, 2024 and sell it today you would earn a total of 540.00 from holding VP Bank AG or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glarner Kantonalbank vs. VP Bank AG
Performance |
| Timeline |
| Glarner Kantonalbank |
| VP Bank AG |
Glarner Kantonalbank and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glarner Kantonalbank and VP Bank
The main advantage of trading using opposite Glarner Kantonalbank and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glarner Kantonalbank 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.| Glarner Kantonalbank vs. Berner Kantonalbank AG | Glarner Kantonalbank vs. Luzerner Kantonalbank AG | Glarner Kantonalbank vs. Banque Cantonale | Glarner Kantonalbank vs. Liechtensteinische Landesbank AG |
| VP Bank vs. Liechtensteinische Landesbank AG | VP Bank vs. Leonteq AG | VP Bank vs. Helvetia Holding AG | VP Bank vs. Valiant 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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