Correlation Between LandisGyr Group and Basler Kantonalbank

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

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

Diversification Opportunities for LandisGyr Group and Basler Kantonalbank

-0.7

Correlation Coefficient

LandisGyr Group  Basler Kantonalbank

Excellent diversification

The 3 months correlation between LandisGyr and Basler is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding LandisGyr Group AG and Basler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basler Kantonalbank and LandisGyr Group 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 LandisGyr Group AG are associated (or correlated) with Basler Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basler Kantonalbank has no effect on the direction of LandisGyr Group i.e., LandisGyr Group and Basler Kantonalbank go up and down completely randomly.

Pair Corralation between LandisGyr Group and Basler Kantonalbank

Assuming the 90 days trading horizon LandisGyr Group is expected to generate 2.82 times less return on investment than Basler Kantonalbank. In addition to that, LandisGyr Group is 2.17 times more volatile than Basler Kantonalbank. It trades about 0.03 of its total potential returns per unit of risk. Basler Kantonalbank is currently generating about 0.16 per unit of volatility. If you would invest  6,900  in Basler Kantonalbank on October 9, 2024 and sell it today you would earn a total of  140.00  from holding Basler Kantonalbank or generate 2.03% return on investment over 90 days.

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

LandisGyr Group AG  vs.  Basler Kantonalbank

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.

Basler Kantonalbank

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Basler Kantonalbank has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with LandisGyr Group and Basler Kantonalbank

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

The idea behind LandisGyr Group AG and Basler 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.