Correlation Between Basler Kantonalbank and Thurgauer Kantonalbank

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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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Basler Kantonalbank  vs.  Thurgauer Kantonalbank

 Performance 
       Timeline  
Basler Kantonalbank 

Risk-Adjusted Performance

5 of 100

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

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Thurgauer Kantonalbank are ranked lower than 2 (%) 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.

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.
The idea behind Basler Kantonalbank and Thurgauer 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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