Correlation Between Glarner Kantonalbank and Logitech International

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

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

Diversification Opportunities for Glarner Kantonalbank and Logitech International

0.45

Correlation Coefficient

Glarner Kantonalbank  Logitech International

Very weak diversification

The 3 months correlation between Glarner and Logitech is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Glarner Kantonalbank and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International and Glarner 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 Glarner Kantonalbank are associated (or correlated) with Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of Glarner Kantonalbank i.e., Glarner Kantonalbank and Logitech International go up and down completely randomly.

Pair Corralation between Glarner Kantonalbank and Logitech International

Assuming the 90 days trading horizon Glarner Kantonalbank is expected to generate 21.62 times less return on investment than Logitech International. But when comparing it to its historical volatility, Glarner Kantonalbank is 2.15 times less risky than Logitech International. It trades about 0.01 of its potential returns per unit of risk. Logitech International SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,028  in Logitech International SA on October 25, 2024 and sell it today you would earn a total of  962.00  from holding Logitech International SA or generate 13.69% return on investment over 90 days.

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

Glarner Kantonalbank  vs.  Logitech International SA

Glarner Kantonalbank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glarner Kantonalbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Glarner Kantonalbank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Logitech International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logitech International SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Logitech International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glarner Kantonalbank and Logitech International

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

The idea behind Glarner Kantonalbank and Logitech International SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.