Correlation Between PSP Swiss and Zuger Kantonalbank
Can any of the company-specific risk be diversified away by investing in both PSP Swiss and Zuger 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 PSP Swiss and Zuger Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PSP Swiss Property and Zuger Kantonalbank, you can compare the effects of market volatilities on PSP Swiss and Zuger 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 PSP Swiss with a short position of Zuger Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSP Swiss and Zuger Kantonalbank.
Diversification Opportunities for PSP Swiss and Zuger Kantonalbank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PSP and Zuger is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PSP Swiss Property and Zuger Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zuger Kantonalbank and PSP Swiss 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 PSP Swiss Property are associated (or correlated) with Zuger Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zuger Kantonalbank has no effect on the direction of PSP Swiss i.e., PSP Swiss and Zuger Kantonalbank go up and down completely randomly.
Pair Corralation between PSP Swiss and Zuger Kantonalbank
Assuming the 90 days trading horizon PSP Swiss Property is expected to generate 1.12 times more return on investment than Zuger Kantonalbank. However, PSP Swiss is 1.12 times more volatile than Zuger Kantonalbank. It trades about 0.11 of its potential returns per unit of risk. Zuger Kantonalbank is currently generating about 0.09 per unit of risk. If you would invest 11,049 in PSP Swiss Property on November 7, 2024 and sell it today you would earn a total of 2,421 from holding PSP Swiss Property or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
PSP Swiss Property vs. Zuger Kantonalbank
Performance |
| Timeline |
| PSP Swiss Property |
| Zuger Kantonalbank |
PSP Swiss and Zuger Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PSP Swiss and Zuger Kantonalbank
The main advantage of trading using opposite PSP Swiss and Zuger Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSP Swiss position performs unexpectedly, Zuger 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 Zuger Kantonalbank will offset losses from the drop in Zuger Kantonalbank's long position.| PSP Swiss vs. Swiss Prime Site | PSP Swiss vs. Allreal Holding | PSP Swiss vs. Mobimo Hldg | PSP Swiss vs. Helvetia Holding AG |
| Zuger Kantonalbank vs. Banque Cantonale | Zuger Kantonalbank vs. St Galler Kantonalbank | Zuger Kantonalbank vs. Luzerner Kantonalbank AG | Zuger Kantonalbank vs. PSP Swiss Property |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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