Correlation Between St Galler and Meyer Burger
Can any of the company-specific risk be diversified away by investing in both St Galler and Meyer Burger 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 St Galler and Meyer Burger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Meyer Burger Tech, you can compare the effects of market volatilities on St Galler and Meyer Burger 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 St Galler with a short position of Meyer Burger. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Meyer Burger.
Diversification Opportunities for St Galler and Meyer Burger
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SGKN and Meyer is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Meyer Burger Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meyer Burger Tech and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Meyer Burger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meyer Burger Tech has no effect on the direction of St Galler i.e., St Galler and Meyer Burger go up and down completely randomly.
Pair Corralation between St Galler and Meyer Burger
Assuming the 90 days trading horizon St Galler is expected to generate 62.36 times less return on investment than Meyer Burger. But when comparing it to its historical volatility, St Galler Kantonalbank is 43.21 times less risky than Meyer Burger. It trades about 0.08 of its potential returns per unit of risk. Meyer Burger Tech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Meyer Burger Tech on September 26, 2024 and sell it today you would earn a total of 72.00 from holding Meyer Burger Tech or generate 45.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
St Galler Kantonalbank vs. Meyer Burger Tech
Performance |
Timeline |
St Galler Kantonalbank |
Meyer Burger Tech |
St Galler and Meyer Burger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with St Galler and Meyer Burger
The main advantage of trading using opposite St Galler and Meyer Burger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Meyer Burger 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 Meyer Burger will offset losses from the drop in Meyer Burger's long position.St Galler vs. Banque Cantonale | St Galler vs. Berner Kantonalbank AG | St Galler vs. Valiant Holding AG | St Galler vs. Graubuendner 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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