Correlation Between Basler Kantonalbank and LandisGyr Group

Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and LandisGyr Group 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 Basler Kantonalbank and LandisGyr Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Basler Kantonalbank and LandisGyr Group AG, you can compare the effects of market volatilities on Basler Kantonalbank and LandisGyr Group 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 Basler Kantonalbank with a short position of LandisGyr Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and LandisGyr Group.

Diversification Opportunities for Basler Kantonalbank and LandisGyr Group

-0.64

Correlation Coefficient

Basler Kantonalbank  LandisGyr Group

Excellent diversification

The 3 months correlation between Basler and LandisGyr is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and LandisGyr Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandisGyr Group AG and Basler 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 Basler Kantonalbank are associated (or correlated) with LandisGyr Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandisGyr Group AG has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and LandisGyr Group go up and down completely randomly.

Pair Corralation between Basler Kantonalbank and LandisGyr Group

Assuming the 90 days trading horizon Basler Kantonalbank is expected to generate 0.35 times more return on investment than LandisGyr Group. However, Basler Kantonalbank is 2.87 times less risky than LandisGyr Group. It trades about 0.22 of its potential returns per unit of risk. LandisGyr Group AG is currently generating about -0.14 per unit of risk. If you would invest  6,580  in Basler Kantonalbank on October 23, 2024 and sell it today you would earn a total of  540.00  from holding Basler Kantonalbank or generate 8.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Basler Kantonalbank  vs.  LandisGyr Group AG

Basler Kantonalbank

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Basler Kantonalbank are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Basler Kantonalbank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

LandisGyr Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LandisGyr Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Basler Kantonalbank and LandisGyr Group

The main advantage of trading using opposite Basler Kantonalbank and LandisGyr Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, LandisGyr Group 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 LandisGyr Group will offset losses from the drop in LandisGyr Group's long position.

The idea behind Basler Kantonalbank and LandisGyr Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.