Correlation Between Hypothekarbank Lenzburg and Basellandschaftliche

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

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

Diversification Opportunities for Hypothekarbank Lenzburg and Basellandschaftliche

-0.58

Correlation Coefficient

Hypothekarbank Lenzburg  Basellandschaftliche

Excellent diversification

The 3 months correlation between Hypothekarbank and Basellandschaftliche is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hypothekarbank Lenzburg AG and Basellandschaftliche Kantonalb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basellandschaftliche and Hypothekarbank Lenzburg 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 Hypothekarbank Lenzburg AG are associated (or correlated) with Basellandschaftliche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basellandschaftliche has no effect on the direction of Hypothekarbank Lenzburg i.e., Hypothekarbank Lenzburg and Basellandschaftliche go up and down completely randomly.

Pair Corralation between Hypothekarbank Lenzburg and Basellandschaftliche

Assuming the 90 days trading horizon Hypothekarbank Lenzburg is expected to generate 3.54 times less return on investment than Basellandschaftliche. In addition to that, Hypothekarbank Lenzburg is 1.05 times more volatile than Basellandschaftliche Kantonalbank. It trades about 0.05 of its total potential returns per unit of risk. Basellandschaftliche Kantonalbank is currently generating about 0.17 per unit of volatility. If you would invest  84,800  in Basellandschaftliche Kantonalbank on September 28, 2024 and sell it today you would earn a total of  1,600  from holding Basellandschaftliche Kantonalbank or generate 1.89% return on investment over 90 days.

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

Hypothekarbank Lenzburg AG  vs.  Basellandschaftliche Kantonalb

Hypothekarbank Lenzburg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hypothekarbank Lenzburg AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hypothekarbank Lenzburg is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Basellandschaftliche

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Basellandschaftliche Kantonalbank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Basellandschaftliche is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hypothekarbank Lenzburg and Basellandschaftliche

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

The idea behind Hypothekarbank Lenzburg AG and Basellandschaftliche Kantonalbank 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.