Correlation Between Zuger Kantonalbank and Graubuendner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Zuger Kantonalbank 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 Zuger Kantonalbank and Graubuendner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zuger Kantonalbank and Graubuendner Kantonalbank, you can compare the effects of market volatilities on Zuger Kantonalbank 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 Zuger Kantonalbank with a short position of Graubuendner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zuger Kantonalbank and Graubuendner Kantonalbank.
Diversification Opportunities for Zuger Kantonalbank and Graubuendner Kantonalbank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zuger and Graubuendner is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Zuger Kantonalbank and Graubuendner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graubuendner Kantonalbank and Zuger 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 Zuger Kantonalbank 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 Zuger Kantonalbank i.e., Zuger Kantonalbank and Graubuendner Kantonalbank go up and down completely randomly.
Pair Corralation between Zuger Kantonalbank and Graubuendner Kantonalbank
Assuming the 90 days trading horizon Zuger Kantonalbank is expected to under-perform the Graubuendner Kantonalbank. But the stock apears to be less risky and, when comparing its historical volatility, Zuger Kantonalbank is 1.26 times less risky than Graubuendner Kantonalbank. The stock trades about -0.12 of its potential returns per unit of risk. The Graubuendner Kantonalbank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 169,500 in Graubuendner Kantonalbank on September 12, 2024 and sell it today you would earn a total of 5,500 from holding Graubuendner Kantonalbank or generate 3.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zuger Kantonalbank vs. Graubuendner Kantonalbank
Performance |
Timeline |
Zuger Kantonalbank |
Graubuendner Kantonalbank |
Zuger Kantonalbank and Graubuendner Kantonalbank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zuger Kantonalbank and Graubuendner Kantonalbank
The main advantage of trading using opposite Zuger Kantonalbank and Graubuendner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zuger Kantonalbank 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.Zuger Kantonalbank vs. Banque Cantonale | Zuger Kantonalbank vs. St Galler Kantonalbank | Zuger Kantonalbank vs. Luzerner Kantonalbank AG | Zuger Kantonalbank vs. Berner Kantonalbank AG |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |