Correlation Between Valiant Holding and Graubuendner Kantonalbank

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

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

Diversification Opportunities for Valiant Holding and Graubuendner Kantonalbank

0.26

Correlation Coefficient

Valiant Holding  Graubuendner Kantonalbank

Modest diversification

The 3 months correlation between Valiant and Graubuendner is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Holding AG and Graubuendner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graubuendner Kantonalbank and Valiant Holding 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 Valiant Holding AG are associated (or correlated) with Graubuendner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graubuendner Kantonalbank has no effect on the direction of Valiant Holding i.e., Valiant Holding and Graubuendner Kantonalbank go up and down completely randomly.

Pair Corralation between Valiant Holding and Graubuendner Kantonalbank

Assuming the 90 days trading horizon Valiant Holding is expected to generate 2.73 times less return on investment than Graubuendner Kantonalbank. In addition to that, Valiant Holding is 1.17 times more volatile than Graubuendner Kantonalbank. It trades about 0.03 of its total potential returns per unit of risk. Graubuendner Kantonalbank is currently generating about 0.09 per unit of volatility. If you would invest  172,500  in Graubuendner Kantonalbank on September 27, 2024 and sell it today you would earn a total of  2,000  from holding Graubuendner Kantonalbank or generate 1.16% return on investment over 90 days.

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

Valiant Holding AG  vs.  Graubuendner Kantonalbank

Valiant Holding AG

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Valiant Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Graubuendner Kantonalbank

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Graubuendner Kantonalbank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Graubuendner Kantonalbank 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 Valiant Holding and Graubuendner Kantonalbank

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

The idea behind Valiant Holding AG and Graubuendner 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.