Correlation Between Graubuendner Kantonalbank and Thurgauer Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Graubuendner Kantonalbank and Thurgauer 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 Graubuendner Kantonalbank and Thurgauer Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graubuendner Kantonalbank and Thurgauer Kantonalbank, you can compare the effects of market volatilities on Graubuendner Kantonalbank and Thurgauer 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 Graubuendner Kantonalbank with a short position of Thurgauer Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graubuendner Kantonalbank and Thurgauer Kantonalbank.
Diversification Opportunities for Graubuendner Kantonalbank and Thurgauer Kantonalbank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Graubuendner and Thurgauer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Graubuendner Kantonalbank and Thurgauer Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thurgauer Kantonalbank 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 Thurgauer Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thurgauer Kantonalbank has no effect on the direction of Graubuendner Kantonalbank i.e., Graubuendner Kantonalbank and Thurgauer Kantonalbank go up and down completely randomly.
Pair Corralation between Graubuendner Kantonalbank and Thurgauer Kantonalbank
Assuming the 90 days trading horizon Graubuendner Kantonalbank is expected to generate 1.66 times less return on investment than Thurgauer Kantonalbank. But when comparing it to its historical volatility, Graubuendner Kantonalbank is 1.6 times less risky than Thurgauer Kantonalbank. It trades about 0.16 of its potential returns per unit of risk. Thurgauer Kantonalbank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 12,650 in Thurgauer Kantonalbank on October 25, 2024 and sell it today you would earn a total of 300.00 from holding Thurgauer Kantonalbank or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graubuendner Kantonalbank vs. Thurgauer Kantonalbank
Performance |
| Timeline |
| Graubuendner Kantonalbank |
| Thurgauer Kantonalbank |
Graubuendner Kantonalbank and Thurgauer Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graubuendner Kantonalbank and Thurgauer Kantonalbank
The main advantage of trading using opposite Graubuendner Kantonalbank and Thurgauer Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graubuendner Kantonalbank position performs unexpectedly, Thurgauer 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 Thurgauer Kantonalbank will offset losses from the drop in Thurgauer Kantonalbank's long position.The idea behind Graubuendner Kantonalbank and Thurgauer Kantonalbank 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 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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