Correlation Between Swiss Leader and Graubuendner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Swiss Leader and Graubuendner 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 Graubuendner 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 Graubuendner Kantonalbank, you can compare the effects of market volatilities on Swiss Leader and Graubuendner 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 Graubuendner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Graubuendner Kantonalbank.
Diversification Opportunities for Swiss Leader and Graubuendner Kantonalbank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swiss and Graubuendner is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Graubuendner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graubuendner 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 Graubuendner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graubuendner Kantonalbank has no effect on the direction of Swiss Leader i.e., Swiss Leader and Graubuendner Kantonalbank go up and down completely randomly.
Pair Corralation between Swiss Leader and Graubuendner Kantonalbank
Assuming the 90 days trading horizon Swiss Leader Price is expected to generate 0.95 times more return on investment than Graubuendner Kantonalbank. However, Swiss Leader Price is 1.05 times less risky than Graubuendner Kantonalbank. It trades about 0.04 of its potential returns per unit of risk. Graubuendner Kantonalbank is currently generating about 0.02 per unit of risk. If you would invest 171,417 in Swiss Leader Price on August 28, 2024 and sell it today you would earn a total of 21,873 from holding Swiss Leader Price or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Swiss Leader Price vs. Graubuendner Kantonalbank
Performance |
| Timeline |
Swiss Leader and Graubuendner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Graubuendner Kantonalbank
Pair trading matchups for Graubuendner Kantonalbank
Pair Trading with Swiss Leader and Graubuendner Kantonalbank
The main advantage of trading using opposite Swiss Leader and Graubuendner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader position performs unexpectedly, Graubuendner 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 Graubuendner Kantonalbank will offset losses from the drop in Graubuendner Kantonalbank's long position.| Swiss Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. BB Biotech AG | Swiss Leader vs. Luzerner Kantonalbank AG | Swiss Leader vs. Swiss Steel Holding |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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