Correlation Between Valiant Holding and Glarner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Valiant Holding and Glarner 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 Valiant Holding and Glarner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valiant Holding AG and Glarner Kantonalbank, you can compare the effects of market volatilities on Valiant Holding and Glarner 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 Valiant Holding with a short position of Glarner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valiant Holding and Glarner Kantonalbank.
Diversification Opportunities for Valiant Holding and Glarner Kantonalbank
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valiant and Glarner is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Holding AG and Glarner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glarner Kantonalbank and Valiant Holding 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 Valiant Holding AG are associated (or correlated) with Glarner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glarner Kantonalbank has no effect on the direction of Valiant Holding i.e., Valiant Holding and Glarner Kantonalbank go up and down completely randomly.
Pair Corralation between Valiant Holding and Glarner Kantonalbank
Assuming the 90 days trading horizon Valiant Holding is expected to generate 3.39 times less return on investment than Glarner Kantonalbank. But when comparing it to its historical volatility, Valiant Holding AG is 1.04 times less risky than Glarner Kantonalbank. It trades about 0.08 of its potential returns per unit of risk. Glarner Kantonalbank is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,080 in Glarner Kantonalbank on November 3, 2024 and sell it today you would earn a total of 140.00 from holding Glarner Kantonalbank or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valiant Holding AG vs. Glarner Kantonalbank
Performance |
| Timeline |
| Valiant Holding AG |
| Glarner Kantonalbank |
Valiant Holding and Glarner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valiant Holding and Glarner Kantonalbank
The main advantage of trading using opposite Valiant Holding and Glarner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valiant Holding position performs unexpectedly, Glarner 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 Glarner Kantonalbank will offset losses from the drop in Glarner Kantonalbank's long position.| Valiant Holding vs. Helvetia Holding AG | Valiant Holding vs. Banque Cantonale | Valiant Holding vs. Cembra Money Bank | Valiant Holding vs. Vontobel Holding |
| Glarner Kantonalbank vs. Berner Kantonalbank AG | Glarner Kantonalbank vs. Luzerner Kantonalbank AG | Glarner Kantonalbank vs. Banque Cantonale | Glarner Kantonalbank vs. Liechtensteinische Landesbank 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 CEOs Directory module to screen CEOs from public companies around the world.
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