Correlation Between Metall Zug and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Metall Zug and Berner 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 Metall Zug and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metall Zug AG and Berner Kantonalbank AG, you can compare the effects of market volatilities on Metall Zug and Berner 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 Metall Zug with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and Berner Kantonalbank.
Diversification Opportunities for Metall Zug and Berner Kantonalbank
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metall and Berner is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Metall Zug 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 Metall Zug AG are associated (or correlated) with Berner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berner Kantonalbank has no effect on the direction of Metall Zug i.e., Metall Zug and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Metall Zug and Berner Kantonalbank
Assuming the 90 days trading horizon Metall Zug AG is expected to under-perform the Berner Kantonalbank. In addition to that, Metall Zug is 3.76 times more volatile than Berner Kantonalbank AG. It trades about -0.42 of its total potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.37 per unit of volatility. If you would invest 23,500 in Berner Kantonalbank AG on October 26, 2024 and sell it today you would earn a total of 800.00 from holding Berner Kantonalbank AG or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metall Zug AG vs. Berner Kantonalbank AG
Performance |
| Timeline |
| Metall Zug AG |
| Berner Kantonalbank |
Metall Zug and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metall Zug and Berner Kantonalbank
The main advantage of trading using opposite Metall Zug and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metall Zug position performs unexpectedly, Berner 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 Berner Kantonalbank will offset losses from the drop in Berner Kantonalbank's long position.| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Emmi AG |
| Berner Kantonalbank vs. Banque Cantonale | Berner Kantonalbank vs. Luzerner Kantonalbank AG | Berner Kantonalbank vs. St Galler Kantonalbank | Berner Kantonalbank vs. Basler Kantonalbank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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