Correlation Between Banque Cantonale and Liechtensteinische

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

By analyzing existing cross correlation between Banque Cantonale and Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Banque Cantonale and Liechtensteinische 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 Banque Cantonale with a short position of Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Liechtensteinische.

Diversification Opportunities for Banque Cantonale and Liechtensteinische

-0.04

Correlation Coefficient

Banque Cantonale  Liechtensteinische

Good diversification

The 3 months correlation between Banque and Liechtensteinische is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische and Banque Cantonale 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 Banque Cantonale are associated (or correlated) with Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Liechtensteinische go up and down completely randomly.

Pair Corralation between Banque Cantonale and Liechtensteinische

Assuming the 90 days trading horizon Banque Cantonale is expected to under-perform the Liechtensteinische. But the stock apears to be less risky and, when comparing its historical volatility, Banque Cantonale is 1.16 times less risky than Liechtensteinische. The stock trades about -0.06 of its potential returns per unit of risk. The Liechtensteinische Landesbank AG is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  7,620  in Liechtensteinische Landesbank AG on May 4, 2025 and sell it today you would earn a total of  1,070  from holding Liechtensteinische Landesbank AG or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Banque Cantonale  vs.  Liechtensteinische Landesbank

Banque Cantonale

Risk-Adjusted Performance

Very Weak

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

Liechtensteinische

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Liechtensteinische Landesbank AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Liechtensteinische showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banque Cantonale and Liechtensteinische

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

The idea behind Banque Cantonale and Liechtensteinische Landesbank AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.