Correlation Between Litigation Capital and St Galler
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and St Galler 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 Litigation Capital and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and St Galler Kantonalbank, you can compare the effects of market volatilities on Litigation Capital and St Galler 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 Litigation Capital with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and St Galler.
Diversification Opportunities for Litigation Capital and St Galler
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Litigation and 0QQZ is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Litigation Capital i.e., Litigation Capital and St Galler go up and down completely randomly.
Pair Corralation between Litigation Capital and St Galler
Assuming the 90 days trading horizon Litigation Capital Management is expected to generate 3.11 times more return on investment than St Galler. However, Litigation Capital is 3.11 times more volatile than St Galler Kantonalbank. It trades about 0.05 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.02 per unit of risk. If you would invest 6,798 in Litigation Capital Management on October 11, 2024 and sell it today you would earn a total of 3,352 from holding Litigation Capital Management or generate 49.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. St Galler Kantonalbank
Performance |
| Timeline |
| Litigation Capital |
| St Galler Kantonalbank |
Litigation Capital and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and St Galler
The main advantage of trading using opposite Litigation Capital and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.| Litigation Capital vs. Orient Telecoms | Litigation Capital vs. Zoom Video Communications | Litigation Capital vs. Check Point Software | Litigation Capital vs. Compal Electronics GDR |
| St Galler vs. Molson Coors Beverage | St Galler vs. Litigation Capital Management | St Galler vs. Norwegian Air Shuttle | St Galler vs. Monster Beverage Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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