Correlation Between Meyer Burger and Luzerner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Meyer Burger and Luzerner 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 Meyer Burger and Luzerner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meyer Burger Tech and Luzerner Kantonalbank AG, you can compare the effects of market volatilities on Meyer Burger and Luzerner 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 Meyer Burger with a short position of Luzerner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meyer Burger and Luzerner Kantonalbank.
Diversification Opportunities for Meyer Burger and Luzerner Kantonalbank
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meyer and Luzerner is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Meyer Burger Tech and Luzerner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzerner Kantonalbank and Meyer Burger 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 Meyer Burger Tech are associated (or correlated) with Luzerner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzerner Kantonalbank has no effect on the direction of Meyer Burger i.e., Meyer Burger and Luzerner Kantonalbank go up and down completely randomly.
Pair Corralation between Meyer Burger and Luzerner Kantonalbank
Assuming the 90 days trading horizon Meyer Burger Tech is expected to under-perform the Luzerner Kantonalbank. In addition to that, Meyer Burger is 24.54 times more volatile than Luzerner Kantonalbank AG. It trades about 0.0 of its total potential returns per unit of risk. Luzerner Kantonalbank AG is currently generating about -0.04 per unit of volatility. If you would invest 6,858 in Luzerner Kantonalbank AG on September 25, 2024 and sell it today you would lose (528.00) from holding Luzerner Kantonalbank AG or give up 7.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Meyer Burger Tech vs. Luzerner Kantonalbank AG
Performance |
Timeline |
Meyer Burger Tech |
Luzerner Kantonalbank |
Meyer Burger and Luzerner Kantonalbank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meyer Burger and Luzerner Kantonalbank
The main advantage of trading using opposite Meyer Burger and Luzerner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meyer Burger position performs unexpectedly, Luzerner 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 Luzerner Kantonalbank will offset losses from the drop in Luzerner Kantonalbank's long position.Meyer Burger vs. Luzerner Kantonalbank AG | Meyer Burger vs. Berner Kantonalbank AG | Meyer Burger vs. Basler Kantonalbank | Meyer Burger vs. St Galler Kantonalbank |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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