Correlation Between Swiss Leader and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Swiss Leader 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 Swiss Leader and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and Berner Kantonalbank AG, you can compare the effects of market volatilities on Swiss Leader 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 Swiss Leader with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Berner Kantonalbank.
Diversification Opportunities for Swiss Leader and Berner Kantonalbank
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Swiss and Berner is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Swiss Leader 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 Swiss Leader Price 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 Swiss Leader i.e., Swiss Leader and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Swiss Leader and Berner Kantonalbank
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the Berner Kantonalbank. In addition to that, Swiss Leader is 1.38 times more volatile than Berner Kantonalbank AG. It trades about -0.07 of its total potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.03 per unit of volatility. If you would invest 23,000 in Berner Kantonalbank AG on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Berner Kantonalbank AG or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Berner Kantonalbank AG
Performance |
| Timeline |
Swiss Leader and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Berner Kantonalbank AG
Pair trading matchups for Berner Kantonalbank
Pair Trading with Swiss Leader and Berner Kantonalbank
The main advantage of trading using opposite Swiss Leader and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader 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.| Swiss Leader vs. Adval Tech Holding | Swiss Leader vs. mobilezone ag | Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Zurich Insurance Group |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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