Correlation Between Zuger Kantonalbank and Swiss Leader
Can any of the company-specific risk be diversified away by investing in both Zuger Kantonalbank and Swiss Leader 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 Zuger Kantonalbank and Swiss Leader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zuger Kantonalbank and Swiss Leader Price, you can compare the effects of market volatilities on Zuger Kantonalbank and Swiss Leader 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 Zuger Kantonalbank with a short position of Swiss Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zuger Kantonalbank and Swiss Leader.
Diversification Opportunities for Zuger Kantonalbank and Swiss Leader
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zuger and Swiss is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zuger Kantonalbank and Swiss Leader Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Leader Price and Zuger Kantonalbank 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 Zuger Kantonalbank are associated (or correlated) with Swiss Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Leader Price has no effect on the direction of Zuger Kantonalbank i.e., Zuger Kantonalbank and Swiss Leader go up and down completely randomly.
Pair Corralation between Zuger Kantonalbank and Swiss Leader
Assuming the 90 days trading horizon Zuger Kantonalbank is expected to generate 0.85 times more return on investment than Swiss Leader. However, Zuger Kantonalbank is 1.18 times less risky than Swiss Leader. It trades about 0.06 of its potential returns per unit of risk. Swiss Leader Price is currently generating about 0.05 per unit of risk. If you would invest 742,043 in Zuger Kantonalbank on September 20, 2024 and sell it today you would earn a total of 69,957 from holding Zuger Kantonalbank or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zuger Kantonalbank vs. Swiss Leader Price
Performance |
| Timeline |
Zuger Kantonalbank and Swiss Leader Volatility Contrast
Predicted Return Density |
| Returns |
Zuger Kantonalbank
Pair trading matchups for Zuger Kantonalbank
Swiss Leader Price
Pair trading matchups for Swiss Leader
Pair Trading with Zuger Kantonalbank and Swiss Leader
The main advantage of trading using opposite Zuger Kantonalbank and Swiss Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zuger Kantonalbank position performs unexpectedly, Swiss Leader 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 Swiss Leader will offset losses from the drop in Swiss Leader's long position.| Zuger Kantonalbank vs. Banque Cantonale | Zuger Kantonalbank vs. St Galler Kantonalbank | Zuger Kantonalbank vs. Luzerner Kantonalbank AG | Zuger Kantonalbank vs. Berner Kantonalbank AG |
| Swiss Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. Metall Zug AG | Swiss Leader vs. Zuger Kantonalbank | Swiss Leader vs. Schweizerische Nationalbank |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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