Correlation Between Bank Fr and BKS Bank

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

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

Diversification Opportunities for Bank Fr and BKS Bank

0.0

Correlation Coefficient

Bank Fr  BKS Bank

Pay attention - limited upside

The 3 months correlation between Bank and BKS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Fr Tirol and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and Bank Fr 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 Bank Fr Tirol are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of Bank Fr i.e., Bank Fr and BKS Bank go up and down completely randomly.

Pair Corralation between Bank Fr and BKS Bank

If you would invest (100.00) in Bank Fr Tirol on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Bank Fr Tirol or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Fr Tirol  vs.  BKS Bank AG

Bank Fr Tirol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Fr Tirol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank Fr is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

BKS Bank AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BKS Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BKS Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bank Fr and BKS Bank

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

The idea behind Bank Fr Tirol and BKS Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.