Correlation Between Glarner Kantonalbank and PHOENIX N

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

By analyzing existing cross correlation between Glarner Kantonalbank and PHOENIX N AG, you can compare the effects of market volatilities on Glarner Kantonalbank and PHOENIX N 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 PHOENIX N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glarner Kantonalbank and PHOENIX N.

Diversification Opportunities for Glarner Kantonalbank and PHOENIX N

-0.19

Correlation Coefficient

Glarner Kantonalbank  PHOENIX N

Good diversification

The 3 months correlation between Glarner and PHOENIX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Glarner Kantonalbank and PHOENIX N AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX N AG 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 PHOENIX N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX N AG has no effect on the direction of Glarner Kantonalbank i.e., Glarner Kantonalbank and PHOENIX N go up and down completely randomly.

Pair Corralation between Glarner Kantonalbank and PHOENIX N

Assuming the 90 days trading horizon Glarner Kantonalbank is expected to generate 0.46 times more return on investment than PHOENIX N. However, Glarner Kantonalbank is 2.2 times less risky than PHOENIX N. It trades about -0.03 of its potential returns per unit of risk. PHOENIX N AG is currently generating about -0.07 per unit of risk. If you would invest  2,120  in Glarner Kantonalbank on October 1, 2024 and sell it today you would lose (40.00) from holding Glarner Kantonalbank or give up 1.89% of portfolio value over 90 days.

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

Glarner Kantonalbank  vs.  PHOENIX N AG

Glarner Kantonalbank

Risk-Adjusted Performance

0 of 100

Very Weak

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

PHOENIX N AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHOENIX N AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Glarner Kantonalbank and PHOENIX N

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

The idea behind Glarner Kantonalbank and PHOENIX N 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.