Correlation Between Thurgauer Kantonalbank and Swiss Leader
Can any of the company-specific risk be diversified away by investing in both Thurgauer Kantonalbank and Swiss Leader 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 Thurgauer Kantonalbank and Swiss Leader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thurgauer Kantonalbank and Swiss Leader Price, you can compare the effects of market volatilities on Thurgauer Kantonalbank and Swiss Leader 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 Thurgauer Kantonalbank with a short position of Swiss Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thurgauer Kantonalbank and Swiss Leader.
Diversification Opportunities for Thurgauer Kantonalbank and Swiss Leader
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thurgauer and Swiss is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thurgauer Kantonalbank and Swiss Leader Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Leader Price and Thurgauer Kantonalbank 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 Thurgauer Kantonalbank are associated (or correlated) with Swiss Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Leader Price has no effect on the direction of Thurgauer Kantonalbank i.e., Thurgauer Kantonalbank and Swiss Leader go up and down completely randomly.
Pair Corralation between Thurgauer Kantonalbank and Swiss Leader
Assuming the 90 days trading horizon Thurgauer Kantonalbank is expected to generate 0.98 times more return on investment than Swiss Leader. However, Thurgauer Kantonalbank is 1.02 times less risky than Swiss Leader. It trades about 0.05 of its potential returns per unit of risk. Swiss Leader Price is currently generating about 0.03 per unit of risk. If you would invest 12,500 in Thurgauer Kantonalbank on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Thurgauer Kantonalbank or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thurgauer Kantonalbank vs. Swiss Leader Price
Performance |
| Timeline |
Thurgauer Kantonalbank and Swiss Leader Volatility Contrast
Predicted Return Density |
| Returns |
Thurgauer Kantonalbank
Pair trading matchups for Thurgauer Kantonalbank
Swiss Leader Price
Pair trading matchups for Swiss Leader
Pair Trading with Thurgauer Kantonalbank and Swiss Leader
The main advantage of trading using opposite Thurgauer Kantonalbank and Swiss Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thurgauer Kantonalbank position performs unexpectedly, Swiss Leader 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 Swiss Leader will offset losses from the drop in Swiss Leader's long position.| Thurgauer Kantonalbank vs. St Galler Kantonalbank | Thurgauer Kantonalbank vs. Berner Kantonalbank AG | Thurgauer Kantonalbank vs. Basler Kantonalbank | Thurgauer Kantonalbank vs. Luzerner Kantonalbank AG |
| Swiss Leader vs. Graubuendner Kantonalbank | Swiss Leader vs. Thurgauer Kantonalbank | Swiss Leader vs. mobilezone ag | Swiss Leader vs. Zurich Insurance Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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