Correlation Between Luzerner Kantonalbank and Schweizerische Nationalbank
Can any of the company-specific risk be diversified away by investing in both Luzerner Kantonalbank and Schweizerische Nationalbank 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 Luzerner Kantonalbank and Schweizerische Nationalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luzerner Kantonalbank AG and Schweizerische Nationalbank, you can compare the effects of market volatilities on Luzerner Kantonalbank and Schweizerische Nationalbank 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 Luzerner Kantonalbank with a short position of Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luzerner Kantonalbank and Schweizerische Nationalbank.
Diversification Opportunities for Luzerner Kantonalbank and Schweizerische Nationalbank
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luzerner and Schweizerische is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Luzerner Kantonalbank AG and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank and Luzerner 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 Luzerner Kantonalbank AG are associated (or correlated) with Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Luzerner Kantonalbank i.e., Luzerner Kantonalbank and Schweizerische Nationalbank go up and down completely randomly.
Pair Corralation between Luzerner Kantonalbank and Schweizerische Nationalbank
Assuming the 90 days trading horizon Luzerner Kantonalbank AG is expected to generate 0.54 times more return on investment than Schweizerische Nationalbank. However, Luzerner Kantonalbank AG is 1.87 times less risky than Schweizerische Nationalbank. It trades about 0.01 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.13 per unit of risk. If you would invest 6,330 in Luzerner Kantonalbank AG on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Luzerner Kantonalbank AG or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luzerner Kantonalbank AG vs. Schweizerische Nationalbank
Performance |
| Timeline |
| Luzerner Kantonalbank |
| Schweizerische Nationalbank |
Luzerner Kantonalbank and Schweizerische Nationalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luzerner Kantonalbank and Schweizerische Nationalbank
The main advantage of trading using opposite Luzerner Kantonalbank and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luzerner Kantonalbank position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank's long position.| Luzerner Kantonalbank vs. St Galler Kantonalbank | Luzerner Kantonalbank vs. Banque Cantonale | Luzerner Kantonalbank vs. Berner Kantonalbank AG | Luzerner Kantonalbank vs. Emmi 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |