Correlation Between St Galler and PSP Swiss
Can any of the company-specific risk be diversified away by investing in both St Galler and PSP Swiss 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 St Galler and PSP Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and PSP Swiss Property, you can compare the effects of market volatilities on St Galler and PSP Swiss 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 St Galler with a short position of PSP Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and PSP Swiss.
Diversification Opportunities for St Galler and PSP Swiss
Good diversification
The 3 months correlation between SGKN and PSP is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and PSP Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSP Swiss Property and St Galler 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 St Galler Kantonalbank are associated (or correlated) with PSP Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSP Swiss Property has no effect on the direction of St Galler i.e., St Galler and PSP Swiss go up and down completely randomly.
Pair Corralation between St Galler and PSP Swiss
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to under-perform the PSP Swiss. But the stock apears to be less risky and, when comparing its historical volatility, St Galler Kantonalbank is 1.92 times less risky than PSP Swiss. The stock trades about -0.13 of its potential returns per unit of risk. The PSP Swiss Property is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,370 in PSP Swiss Property on August 28, 2024 and sell it today you would earn a total of 150.00 from holding PSP Swiss Property or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. PSP Swiss Property
Performance |
| Timeline |
| St Galler Kantonalbank |
| PSP Swiss Property |
St Galler and PSP Swiss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and PSP Swiss
The main advantage of trading using opposite St Galler and PSP Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, PSP Swiss 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 PSP Swiss will offset losses from the drop in PSP Swiss' long position.| St Galler vs. Swissquote Group Holding | St Galler vs. Banque Cantonale | St Galler vs. Barry Callebaut AG | St Galler vs. Vontobel Holding |
| PSP Swiss vs. Swiss Prime Site | PSP Swiss vs. Allreal Holding | PSP Swiss vs. Mobimo Hldg | PSP Swiss vs. Helvetia 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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