Correlation Between Thurgauer Kantonalbank and Basellandschaftliche

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

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

Diversification Opportunities for Thurgauer Kantonalbank and Basellandschaftliche

0.59

Correlation Coefficient

Thurgauer Kantonalbank  Basellandschaftliche

Very weak diversification

The 3 months correlation between Thurgauer and Basellandschaftliche is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Thurgauer Kantonalbank and Basellandschaftliche Kantonalb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basellandschaftliche and Thurgauer 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 Thurgauer Kantonalbank 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 Thurgauer Kantonalbank i.e., Thurgauer Kantonalbank and Basellandschaftliche go up and down completely randomly.

Pair Corralation between Thurgauer Kantonalbank and Basellandschaftliche

Assuming the 90 days trading horizon Thurgauer Kantonalbank is expected to generate 1.83 times more return on investment than Basellandschaftliche. However, Thurgauer Kantonalbank is 1.83 times more volatile than Basellandschaftliche Kantonalbank. It trades about 0.04 of its potential returns per unit of risk. Basellandschaftliche Kantonalbank is currently generating about 0.01 per unit of risk. If you would invest  11,064  in Thurgauer Kantonalbank on September 28, 2024 and sell it today you would earn a total of  1,586  from holding Thurgauer Kantonalbank or generate 14.33% return on investment over 90 days.

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

Thurgauer Kantonalbank  vs.  Basellandschaftliche Kantonalb

Thurgauer Kantonalbank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thurgauer Kantonalbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Thurgauer Kantonalbank 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 Thurgauer Kantonalbank and Basellandschaftliche

The main advantage of trading using opposite Thurgauer Kantonalbank and Basellandschaftliche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thurgauer Kantonalbank 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 Thurgauer Kantonalbank 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.