Correlation Between Luzerner Kantonalbank and CPH Chemie

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

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

Diversification Opportunities for Luzerner Kantonalbank and CPH Chemie

0.0

Correlation Coefficient

Luzerner Kantonalbank  CPH Chemie

Pay attention - limited upside

The 3 months correlation between Luzerner and CPH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luzerner Kantonalbank AG and CPH Chemie und in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPH Chemie und and Luzerner 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 Luzerner Kantonalbank AG are associated (or correlated) with CPH Chemie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPH Chemie und has no effect on the direction of Luzerner Kantonalbank i.e., Luzerner Kantonalbank and CPH Chemie go up and down completely randomly.

Pair Corralation between Luzerner Kantonalbank and CPH Chemie

If you would invest  6,240  in Luzerner Kantonalbank AG on September 16, 2024 and sell it today you would earn a total of  190.00  from holding Luzerner Kantonalbank AG or generate 3.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Luzerner Kantonalbank AG  vs.  CPH Chemie und

Luzerner Kantonalbank

Risk-Adjusted Performance

5 of 100

Modest

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

CPH Chemie und

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPH Chemie und has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CPH Chemie is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Luzerner Kantonalbank and CPH Chemie

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

The idea behind Luzerner Kantonalbank AG and CPH Chemie und 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.