Correlation Between Basellandschaftliche and Berner Kantonalbank

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

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

Diversification Opportunities for Basellandschaftliche and Berner Kantonalbank

-0.64

Correlation Coefficient

Basellandschaftliche  Berner Kantonalbank

Excellent diversification

The 3 months correlation between Basellandschaftliche and Berner is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Basellandschaftliche Kantonalb and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Basellandschaftliche 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 Basellandschaftliche Kantonalbank are associated (or correlated) with Berner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berner Kantonalbank has no effect on the direction of Basellandschaftliche i.e., Basellandschaftliche and Berner Kantonalbank go up and down completely randomly.

Pair Corralation between Basellandschaftliche and Berner Kantonalbank

Assuming the 90 days trading horizon Basellandschaftliche Kantonalbank is expected to under-perform the Berner Kantonalbank. But the stock apears to be less risky and, when comparing its historical volatility, Basellandschaftliche Kantonalbank is 1.01 times less risky than Berner Kantonalbank. The stock trades about -0.14 of its potential returns per unit of risk. The Berner Kantonalbank AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  24,600  in Berner Kantonalbank AG on May 17, 2025 and sell it today you would earn a total of  1,150  from holding Berner Kantonalbank AG or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Basellandschaftliche Kantonalb  vs.  Berner Kantonalbank AG

Basellandschaftliche

Risk-Adjusted Performance

Weakest

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

Berner Kantonalbank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Berner Kantonalbank AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Berner Kantonalbank is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Basellandschaftliche and Berner Kantonalbank

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

The idea behind Basellandschaftliche Kantonalbank and Berner Kantonalbank 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.