Correlation Between VP Bank and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both VP Bank and Liechtensteinische 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 Liechtensteinische 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 Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on VP Bank and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of VP Bank and Liechtensteinische.
Diversification Opportunities for VP Bank and Liechtensteinische
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VPBN and Liechtensteinische is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding VP Bank AG and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of VP Bank i.e., VP Bank and Liechtensteinische go up and down completely randomly.
Pair Corralation between VP Bank and Liechtensteinische
Assuming the 90 days trading horizon VP Bank AG is expected to generate 3.01 times more return on investment than Liechtensteinische. However, VP Bank is 3.01 times more volatile than Liechtensteinische Landesbank AG. It trades about 0.04 of its potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about -0.17 per unit of risk. If you would invest 7,360 in VP Bank AG on August 27, 2024 and sell it today you would earn a total of 80.00 from holding VP Bank AG or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VP Bank AG vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| VP Bank AG |
| Liechtensteinische |
VP Bank and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VP Bank and Liechtensteinische
The main advantage of trading using opposite VP Bank and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VP Bank position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische'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 |
| Liechtensteinische vs. VP Bank AG | Liechtensteinische vs. Valiant Holding AG | Liechtensteinische vs. Glarner Kantonalbank | Liechtensteinische vs. Berner Kantonalbank 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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