Correlation Between Vontobel Holding and Berner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Vontobel Holding 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 Vontobel Holding and Berner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vontobel Holding and Berner Kantonalbank AG, you can compare the effects of market volatilities on Vontobel Holding 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 Vontobel Holding with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vontobel Holding and Berner Kantonalbank.
Diversification Opportunities for Vontobel Holding and Berner Kantonalbank
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vontobel and Berner is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vontobel Holding and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Vontobel 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 Vontobel Holding 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 Vontobel Holding i.e., Vontobel Holding and Berner Kantonalbank go up and down completely randomly.
Pair Corralation between Vontobel Holding and Berner Kantonalbank
Assuming the 90 days trading horizon Vontobel Holding is expected to under-perform the Berner Kantonalbank. In addition to that, Vontobel Holding is 1.6 times more volatile than Berner Kantonalbank AG. It trades about -0.03 of its total potential returns per unit of risk. Berner Kantonalbank AG is currently generating about -0.04 per unit of volatility. If you would invest 23,400 in Berner Kantonalbank AG on August 27, 2024 and sell it today you would lose (100.00) from holding Berner Kantonalbank AG or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vontobel Holding vs. Berner Kantonalbank AG
Performance |
| Timeline |
| Vontobel Holding |
| Berner Kantonalbank |
Vontobel Holding and Berner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vontobel Holding and Berner Kantonalbank
The main advantage of trading using opposite Vontobel Holding and Berner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vontobel Holding 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.| Vontobel Holding vs. Bachem Holding AG | Vontobel Holding vs. Kudelski | Vontobel Holding vs. Alpine Select AG | Vontobel Holding vs. BB Biotech AG |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |