Correlation Between Graubuendner Kantonalbank and Cicor Technologies
Can any of the company-specific risk be diversified away by investing in both Graubuendner Kantonalbank and Cicor Technologies 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 Graubuendner Kantonalbank and Cicor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graubuendner Kantonalbank and Cicor Technologies, you can compare the effects of market volatilities on Graubuendner Kantonalbank and Cicor Technologies 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 Graubuendner Kantonalbank with a short position of Cicor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graubuendner Kantonalbank and Cicor Technologies.
Diversification Opportunities for Graubuendner Kantonalbank and Cicor Technologies
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Graubuendner and Cicor is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Graubuendner Kantonalbank and Cicor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicor Technologies and Graubuendner 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 Graubuendner Kantonalbank are associated (or correlated) with Cicor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicor Technologies has no effect on the direction of Graubuendner Kantonalbank i.e., Graubuendner Kantonalbank and Cicor Technologies go up and down completely randomly.
Pair Corralation between Graubuendner Kantonalbank and Cicor Technologies
Assuming the 90 days trading horizon Graubuendner Kantonalbank is expected to generate 7.62 times less return on investment than Cicor Technologies. But when comparing it to its historical volatility, Graubuendner Kantonalbank is 3.35 times less risky than Cicor Technologies. It trades about 0.16 of its potential returns per unit of risk. Cicor Technologies is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 5,620 in Cicor Technologies on October 26, 2024 and sell it today you would earn a total of 680.00 from holding Cicor Technologies or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Graubuendner Kantonalbank vs. Cicor Technologies
Performance |
| Timeline |
| Graubuendner Kantonalbank |
| Cicor Technologies |
Graubuendner Kantonalbank and Cicor Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graubuendner Kantonalbank and Cicor Technologies
The main advantage of trading using opposite Graubuendner Kantonalbank and Cicor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graubuendner Kantonalbank position performs unexpectedly, Cicor Technologies 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 Cicor Technologies will offset losses from the drop in Cicor Technologies' long position.The idea behind Graubuendner Kantonalbank and Cicor Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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