Correlation Between VP Bank and Glarner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both VP Bank 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 VP Bank and Glarner Kantonalbank 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 Glarner Kantonalbank, you can compare the effects of market volatilities on VP Bank 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 VP Bank with a short position of Glarner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of VP Bank and Glarner Kantonalbank.
Diversification Opportunities for VP Bank and Glarner Kantonalbank
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between VPBN and Glarner is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding VP Bank AG and Glarner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glarner Kantonalbank 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 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 VP Bank i.e., VP Bank and Glarner Kantonalbank go up and down completely randomly.
Pair Corralation between VP Bank and Glarner Kantonalbank
Assuming the 90 days trading horizon VP Bank AG is expected to under-perform the Glarner Kantonalbank. In addition to that, VP Bank is 1.42 times more volatile than Glarner Kantonalbank. It trades about -0.01 of its total potential returns per unit of risk. Glarner Kantonalbank is currently generating about -0.01 per unit of volatility. If you would invest 2,334 in Glarner Kantonalbank on October 23, 2024 and sell it today you would lose (134.00) from holding Glarner Kantonalbank or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VP Bank AG vs. Glarner Kantonalbank
Performance |
| Timeline |
| VP Bank AG |
| Glarner Kantonalbank |
VP Bank and Glarner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VP Bank and Glarner Kantonalbank
The main advantage of trading using opposite VP Bank and Glarner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VP Bank 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.| VP Bank vs. Liechtensteinische Landesbank AG | VP Bank vs. Leonteq AG | VP Bank vs. Helvetia Holding AG | VP Bank vs. Valiant Holding AG |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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