Correlation Between Liechtensteinische and Thurgauer Kantonalbank

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

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

Diversification Opportunities for Liechtensteinische and Thurgauer Kantonalbank

0.9

Correlation Coefficient

Liechtensteinische  Thurgauer Kantonalbank

Almost no diversification

The 3 months correlation between Liechtensteinische and Thurgauer is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Liechtensteinische Landesbank and Thurgauer Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thurgauer Kantonalbank and Liechtensteinische 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 Liechtensteinische Landesbank AG are associated (or correlated) with Thurgauer Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thurgauer Kantonalbank has no effect on the direction of Liechtensteinische i.e., Liechtensteinische and Thurgauer Kantonalbank go up and down completely randomly.

Pair Corralation between Liechtensteinische and Thurgauer Kantonalbank

Assuming the 90 days trading horizon Liechtensteinische Landesbank AG is expected to generate 0.86 times more return on investment than Thurgauer Kantonalbank. However, Liechtensteinische Landesbank AG is 1.16 times less risky than Thurgauer Kantonalbank. It trades about 0.28 of its potential returns per unit of risk. Thurgauer Kantonalbank is currently generating about 0.22 per unit of risk. If you would invest  7,500  in Liechtensteinische Landesbank AG on April 24, 2025 and sell it today you would earn a total of  1,300  from holding Liechtensteinische Landesbank AG or generate 17.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Liechtensteinische Landesbank   vs.  Thurgauer Kantonalbank

Liechtensteinische

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Liechtensteinische Landesbank AG are ranked lower than 22 (%) 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.

Thurgauer Kantonalbank

Risk-Adjusted Performance

Good

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

Pair Trading with Liechtensteinische and Thurgauer Kantonalbank

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

The idea behind Liechtensteinische Landesbank AG and Thurgauer Kantonalbank 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.