Correlation Between Metall Zug and Basler Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Metall Zug and Basler 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 Basler 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 Basler Kantonalbank, you can compare the effects of market volatilities on Metall Zug and Basler 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 Basler Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and Basler Kantonalbank.
Diversification Opportunities for Metall Zug and Basler Kantonalbank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metall and Basler is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG and Basler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basler 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 Basler Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basler Kantonalbank has no effect on the direction of Metall Zug i.e., Metall Zug and Basler Kantonalbank go up and down completely randomly.
Pair Corralation between Metall Zug and Basler Kantonalbank
Assuming the 90 days trading horizon Metall Zug AG is expected to under-perform the Basler Kantonalbank. In addition to that, Metall Zug is 4.46 times more volatile than Basler Kantonalbank. It trades about -0.25 of its total potential returns per unit of risk. Basler Kantonalbank is currently generating about -0.03 per unit of volatility. If you would invest 6,660 in Basler Kantonalbank on August 29, 2024 and sell it today you would lose (20.00) from holding Basler Kantonalbank or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Metall Zug AG vs. Basler Kantonalbank
Performance |
| Timeline |
| Metall Zug AG |
| Basler Kantonalbank |
Metall Zug and Basler Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metall Zug and Basler Kantonalbank
The main advantage of trading using opposite Metall Zug and Basler Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metall Zug position performs unexpectedly, Basler 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 Basler Kantonalbank will offset losses from the drop in Basler 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 |
| Basler Kantonalbank vs. Banque Cantonale | Basler Kantonalbank vs. Berner Kantonalbank AG | Basler Kantonalbank vs. Luzerner Kantonalbank AG | Basler Kantonalbank vs. Banque Cantonale de |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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