Correlation Between Graubuendner Kantonalbank and EMS CHEMIE
Can any of the company-specific risk be diversified away by investing in both Graubuendner Kantonalbank and EMS CHEMIE 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 EMS CHEMIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graubuendner Kantonalbank and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Graubuendner Kantonalbank and EMS CHEMIE 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 EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graubuendner Kantonalbank and EMS CHEMIE.
Diversification Opportunities for Graubuendner Kantonalbank and EMS CHEMIE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Graubuendner and EMS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Graubuendner Kantonalbank and EMS CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS CHEMIE HOLDING 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 EMS CHEMIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS CHEMIE HOLDING has no effect on the direction of Graubuendner Kantonalbank i.e., Graubuendner Kantonalbank and EMS CHEMIE go up and down completely randomly.
Pair Corralation between Graubuendner Kantonalbank and EMS CHEMIE
Assuming the 90 days trading horizon Graubuendner Kantonalbank is expected to generate 0.6 times more return on investment than EMS CHEMIE. However, Graubuendner Kantonalbank is 1.68 times less risky than EMS CHEMIE. It trades about 0.06 of its potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about -0.02 per unit of risk. If you would invest 176,000 in Graubuendner Kantonalbank on November 27, 2024 and sell it today you would earn a total of 1,500 from holding Graubuendner Kantonalbank or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graubuendner Kantonalbank vs. EMS CHEMIE HOLDING AG
Performance |
| Timeline |
| Graubuendner Kantonalbank |
| EMS CHEMIE HOLDING |
Graubuendner Kantonalbank and EMS CHEMIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graubuendner Kantonalbank and EMS CHEMIE
The main advantage of trading using opposite Graubuendner Kantonalbank and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graubuendner Kantonalbank position performs unexpectedly, EMS CHEMIE 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 EMS CHEMIE will offset losses from the drop in EMS CHEMIE's long position.The idea behind Graubuendner Kantonalbank and EMS CHEMIE HOLDING AG 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.
| EMS CHEMIE vs. St Galler Kantonalbank | EMS CHEMIE vs. Adval Tech Holding | EMS CHEMIE vs. Glarner Kantonalbank | EMS CHEMIE vs. HBM Healthcare Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |