Correlation Between Helvetia Holding and Luzerner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and Luzerner 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 Helvetia Holding and Luzerner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and Luzerner Kantonalbank AG, you can compare the effects of market volatilities on Helvetia Holding and Luzerner 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 Helvetia Holding with a short position of Luzerner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Luzerner Kantonalbank.
Diversification Opportunities for Helvetia Holding and Luzerner Kantonalbank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Helvetia and Luzerner is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Luzerner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzerner Kantonalbank and Helvetia Holding 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 Helvetia Holding AG are associated (or correlated) with Luzerner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzerner Kantonalbank has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Luzerner Kantonalbank go up and down completely randomly.
Pair Corralation between Helvetia Holding and Luzerner Kantonalbank
Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 1.36 times more return on investment than Luzerner Kantonalbank. However, Helvetia Holding is 1.36 times more volatile than Luzerner Kantonalbank AG. It trades about 0.1 of its potential returns per unit of risk. Luzerner Kantonalbank AG is currently generating about -0.3 per unit of risk. If you would invest 14,970 in Helvetia Holding AG on August 24, 2024 and sell it today you would earn a total of 250.00 from holding Helvetia Holding AG or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helvetia Holding AG vs. Luzerner Kantonalbank AG
Performance |
| Timeline |
| Helvetia Holding |
| Luzerner Kantonalbank |
Helvetia Holding and Luzerner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helvetia Holding and Luzerner Kantonalbank
The main advantage of trading using opposite Helvetia Holding and Luzerner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, Luzerner 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 Luzerner Kantonalbank will offset losses from the drop in Luzerner Kantonalbank's long position.| Helvetia Holding vs. Swiss Life Holding | Helvetia Holding vs. Baloise Holding AG | Helvetia Holding vs. Swiss Re AG | Helvetia Holding vs. Zurich Insurance Group |
| Luzerner Kantonalbank vs. Helvetia Holding AG | Luzerner Kantonalbank vs. Swiss Life Holding | Luzerner Kantonalbank vs. Baloise Holding AG | Luzerner Kantonalbank vs. Logitech International SA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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