Correlation Between HBM Healthcare and Glarner Kantonalbank

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Can any of the company-specific risk be diversified away by investing in both HBM Healthcare and Glarner 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 HBM Healthcare and Glarner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HBM Healthcare Investments and Glarner Kantonalbank, you can compare the effects of market volatilities on HBM Healthcare and Glarner 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 HBM Healthcare with a short position of Glarner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HBM Healthcare and Glarner Kantonalbank.

Diversification Opportunities for HBM Healthcare and Glarner Kantonalbank

HBMGlarnerDiversified AwayHBMGlarnerDiversified Away100%
0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between HBM and Glarner is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HBM Healthcare Investments and Glarner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glarner Kantonalbank and HBM Healthcare 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 HBM Healthcare Investments are associated (or correlated) with Glarner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glarner Kantonalbank has no effect on the direction of HBM Healthcare i.e., HBM Healthcare and Glarner Kantonalbank go up and down completely randomly.

Pair Corralation between HBM Healthcare and Glarner Kantonalbank

Assuming the 90 days trading horizon HBM Healthcare is expected to generate 1.22 times less return on investment than Glarner Kantonalbank. In addition to that, HBM Healthcare is 2.28 times more volatile than Glarner Kantonalbank. It trades about 0.08 of its total potential returns per unit of risk. Glarner Kantonalbank is currently generating about 0.22 per unit of volatility. If you would invest  2,080  in Glarner Kantonalbank on December 3, 2024 and sell it today you would earn a total of  190.00  from holding Glarner Kantonalbank or generate 9.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.33%
ValuesDaily Returns

HBM Healthcare Investments  vs.  Glarner Kantonalbank

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50
JavaScript chart by amCharts 3.21.15HBMN GLKBN
       Timeline  
HBM Healthcare Inves 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in HBM Healthcare Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, HBM Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar175180185190195200
Glarner Kantonalbank 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Glarner Kantonalbank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Glarner Kantonalbank may actually be approaching a critical reversion point that can send shares even higher in April 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar2121.52222.523

HBM Healthcare and Glarner Kantonalbank Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.0-3.75-2.49-1.240.02171.32.613.915.22 0.20.40.60.8
JavaScript chart by amCharts 3.21.15HBMN GLKBN
       Returns  

Pair Trading with HBM Healthcare and Glarner Kantonalbank

The main advantage of trading using opposite HBM Healthcare and Glarner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HBM Healthcare position performs unexpectedly, Glarner 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 Glarner Kantonalbank will offset losses from the drop in Glarner Kantonalbank's long position.
The idea behind HBM Healthcare Investments and Glarner 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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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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