Correlation Between Luzerner Kantonalbank and LandisGyr Group
Can any of the company-specific risk be diversified away by investing in both Luzerner Kantonalbank and LandisGyr Group 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 LandisGyr Group 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 LandisGyr Group AG, you can compare the effects of market volatilities on Luzerner Kantonalbank and LandisGyr Group 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 LandisGyr Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luzerner Kantonalbank and LandisGyr Group.
Diversification Opportunities for Luzerner Kantonalbank and LandisGyr Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Luzerner and LandisGyr is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Luzerner Kantonalbank AG and LandisGyr Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandisGyr Group AG 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 LandisGyr Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandisGyr Group AG has no effect on the direction of Luzerner Kantonalbank i.e., Luzerner Kantonalbank and LandisGyr Group go up and down completely randomly.
Pair Corralation between Luzerner Kantonalbank and LandisGyr Group
Assuming the 90 days trading horizon Luzerner Kantonalbank AG is expected to generate 0.43 times more return on investment than LandisGyr Group. However, Luzerner Kantonalbank AG is 2.35 times less risky than LandisGyr Group. It trades about 0.06 of its potential returns per unit of risk. LandisGyr Group AG is currently generating about -0.27 per unit of risk. If you would invest 6,150 in Luzerner Kantonalbank AG on September 24, 2024 and sell it today you would earn a total of 170.00 from holding Luzerner Kantonalbank AG or generate 2.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Luzerner Kantonalbank AG vs. LandisGyr Group AG
Performance |
Timeline |
Luzerner Kantonalbank |
LandisGyr Group AG |
Luzerner Kantonalbank and LandisGyr Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luzerner Kantonalbank and LandisGyr Group
The main advantage of trading using opposite Luzerner Kantonalbank and LandisGyr Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luzerner Kantonalbank position performs unexpectedly, LandisGyr Group 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 LandisGyr Group will offset losses from the drop in LandisGyr Group's long position.Luzerner Kantonalbank vs. Helvetia Holding AG | Luzerner Kantonalbank vs. Swiss Life Holding | Luzerner Kantonalbank vs. Baloise Holding AG | Luzerner Kantonalbank vs. Logitech International SA |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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