Correlation Between Liechtensteinische and VP Bank
Can any of the company-specific risk be diversified away by investing in both Liechtensteinische and VP Bank 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 Liechtensteinische and VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liechtensteinische Landesbank AG and VP Bank AG, you can compare the effects of market volatilities on Liechtensteinische and VP Bank 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 Liechtensteinische with a short position of VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liechtensteinische and VP Bank.
Diversification Opportunities for Liechtensteinische and VP Bank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liechtensteinische and VPBN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Liechtensteinische Landesbank and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG and Liechtensteinische 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 Liechtensteinische Landesbank AG are associated (or correlated) with VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Liechtensteinische i.e., Liechtensteinische and VP Bank go up and down completely randomly.
Pair Corralation between Liechtensteinische and VP Bank
Assuming the 90 days trading horizon Liechtensteinische Landesbank AG is expected to under-perform the VP Bank. But the stock apears to be less risky and, when comparing its historical volatility, Liechtensteinische Landesbank AG is 2.86 times less risky than VP Bank. The stock trades about -0.22 of its potential returns per unit of risk. The VP Bank AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,360 in VP Bank AG on August 28, 2024 and sell it today you would earn a total of 200.00 from holding VP Bank AG or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liechtensteinische Landesbank vs. VP Bank AG
Performance |
| Timeline |
| Liechtensteinische |
| VP Bank AG |
Liechtensteinische and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liechtensteinische and VP Bank
The main advantage of trading using opposite Liechtensteinische and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liechtensteinische position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank's long position.| Liechtensteinische vs. VP Bank AG | Liechtensteinische vs. Valiant Holding AG | Liechtensteinische vs. Glarner Kantonalbank | Liechtensteinische vs. Berner Kantonalbank AG |
| VP Bank vs. Liechtensteinische Landesbank AG | VP Bank vs. Leonteq AG | VP Bank vs. Helvetia Holding AG | VP Bank vs. Valiant Holding AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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