Correlation Between Basler Kantonalbank and Thurgauer Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and Thurgauer 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 Basler Kantonalbank and Thurgauer Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basler Kantonalbank and Thurgauer Kantonalbank, you can compare the effects of market volatilities on Basler Kantonalbank and Thurgauer 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 Basler Kantonalbank with a short position of Thurgauer Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and Thurgauer Kantonalbank.
Diversification Opportunities for Basler Kantonalbank and Thurgauer Kantonalbank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basler and Thurgauer is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and Thurgauer Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thurgauer Kantonalbank and Basler 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 Basler Kantonalbank are associated (or correlated) with Thurgauer Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thurgauer Kantonalbank has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and Thurgauer Kantonalbank go up and down completely randomly.
Pair Corralation between Basler Kantonalbank and Thurgauer Kantonalbank
Assuming the 90 days trading horizon Basler Kantonalbank is expected to generate 1.04 times less return on investment than Thurgauer Kantonalbank. But when comparing it to its historical volatility, Basler Kantonalbank is 1.68 times less risky than Thurgauer Kantonalbank. It trades about 0.18 of its potential returns per unit of risk. Thurgauer Kantonalbank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,350 in Thurgauer Kantonalbank on September 25, 2024 and sell it today you would earn a total of 300.00 from holding Thurgauer Kantonalbank or generate 2.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Basler Kantonalbank vs. Thurgauer Kantonalbank
Performance |
Timeline |
Basler Kantonalbank |
Thurgauer Kantonalbank |
Basler Kantonalbank and Thurgauer Kantonalbank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basler Kantonalbank and Thurgauer Kantonalbank
The main advantage of trading using opposite Basler Kantonalbank and Thurgauer Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, Thurgauer 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 Thurgauer Kantonalbank will offset losses from the drop in Thurgauer Kantonalbank's long position.Basler Kantonalbank vs. Banque Cantonale | Basler Kantonalbank vs. St Galler Kantonalbank | Basler Kantonalbank vs. Berner Kantonalbank AG | Basler Kantonalbank vs. Valiant Holding AG |
Thurgauer Kantonalbank vs. St Galler Kantonalbank | Thurgauer Kantonalbank vs. Berner Kantonalbank AG | Thurgauer Kantonalbank vs. Basler Kantonalbank | Thurgauer Kantonalbank vs. Luzerner 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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