Correlation Between Berner Kantonalbank and Valiant Holding
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Valiant Holding 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 Berner Kantonalbank and Valiant Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berner Kantonalbank AG and Valiant Holding AG, you can compare the effects of market volatilities on Berner Kantonalbank and Valiant Holding 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 Berner Kantonalbank with a short position of Valiant Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Valiant Holding.
Diversification Opportunities for Berner Kantonalbank and Valiant Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berner and Valiant is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Valiant Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valiant Holding AG and Berner 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 Berner Kantonalbank AG are associated (or correlated) with Valiant Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valiant Holding AG has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Valiant Holding go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Valiant Holding
Assuming the 90 days trading horizon Berner Kantonalbank is expected to generate 1.14 times less return on investment than Valiant Holding. But when comparing it to its historical volatility, Berner Kantonalbank AG is 1.56 times less risky than Valiant Holding. It trades about 0.14 of its potential returns per unit of risk. Valiant Holding AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,120 in Valiant Holding AG on August 16, 2025 and sell it today you would earn a total of 820.00 from holding Valiant Holding AG or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Valiant Holding AG
Performance |
| Timeline |
| Berner Kantonalbank |
| Valiant Holding AG |
Berner Kantonalbank and Valiant Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Valiant Holding
The main advantage of trading using opposite Berner Kantonalbank and Valiant Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Valiant Holding 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 Valiant Holding will offset losses from the drop in Valiant Holding's long position.| Berner Kantonalbank vs. Liechtensteinische Landesbank AG | Berner Kantonalbank vs. Zuger Kantonalbank | Berner Kantonalbank vs. Cembra Money Bank | Berner Kantonalbank vs. Valiant Holding AG |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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