Correlation Between VP Bank and Calida Holding
Can any of the company-specific risk be diversified away by investing in both VP Bank and Calida Holding 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 VP Bank and Calida Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VP Bank AG and Calida Holding AG, you can compare the effects of market volatilities on VP Bank and Calida Holding 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 VP Bank with a short position of Calida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of VP Bank and Calida Holding.
Diversification Opportunities for VP Bank and Calida Holding
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VPBN and Calida is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding VP Bank AG and Calida Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calida Holding AG and VP Bank 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 VP Bank AG are associated (or correlated) with Calida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calida Holding AG has no effect on the direction of VP Bank i.e., VP Bank and Calida Holding go up and down completely randomly.
Pair Corralation between VP Bank and Calida Holding
Assuming the 90 days trading horizon VP Bank AG is expected to generate 0.69 times more return on investment than Calida Holding. However, VP Bank AG is 1.45 times less risky than Calida Holding. It trades about 0.0 of its potential returns per unit of risk. Calida Holding AG is currently generating about -0.06 per unit of risk. If you would invest 7,806 in VP Bank AG on September 12, 2024 and sell it today you would lose (106.00) from holding VP Bank AG or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VP Bank AG vs. Calida Holding AG
Performance |
| Timeline |
| VP Bank AG |
| Calida Holding AG |
VP Bank and Calida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VP Bank and Calida Holding
The main advantage of trading using opposite VP Bank and Calida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VP Bank position performs unexpectedly, Calida Holding 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 Calida Holding will offset losses from the drop in Calida Holding's long position.| VP Bank vs. Banque Cantonale | VP Bank vs. Berner Kantonalbank AG | VP Bank vs. Luzerner Kantonalbank AG | VP Bank vs. Banque Cantonale de |
| Calida Holding vs. Swatch Group AG | Calida Holding vs. Helvetia Holding AG | Calida Holding vs. Emmi AG | Calida Holding vs. Swissquote Group Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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