Correlation Between Liechtensteinische and Valiant Holding

Can any of the company-specific risk be diversified away by investing in both Liechtensteinische 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 Liechtensteinische and Valiant Holding 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 Valiant Holding AG, you can compare the effects of market volatilities on Liechtensteinische 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 Liechtensteinische with a short position of Valiant Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liechtensteinische and Valiant Holding.

Diversification Opportunities for Liechtensteinische and Valiant Holding

0.9

Correlation Coefficient

Liechtensteinische  Valiant Holding

Almost no diversification

The 3 months correlation between Liechtensteinische and Valiant is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Liechtensteinische Landesbank 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 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 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 Liechtensteinische i.e., Liechtensteinische and Valiant Holding go up and down completely randomly.

Pair Corralation between Liechtensteinische and Valiant Holding

Assuming the 90 days trading horizon Liechtensteinische Landesbank AG is expected to generate 1.17 times more return on investment than Valiant Holding. However, Liechtensteinische is 1.17 times more volatile than Valiant Holding AG. It trades about 0.27 of its potential returns per unit of risk. Valiant Holding AG is currently generating about 0.28 per unit of risk. If you would invest  7,510  in Liechtensteinische Landesbank AG on April 23, 2025 and sell it today you would earn a total of  1,240  from holding Liechtensteinische Landesbank AG or generate 16.51% 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.  Valiant Holding AG

Liechtensteinische

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Liechtensteinische Landesbank AG are ranked lower than 21 (%) 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.

Valiant Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Valiant Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liechtensteinische and Valiant Holding

The main advantage of trading using opposite Liechtensteinische and Valiant Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liechtensteinische 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.

The idea behind Liechtensteinische Landesbank AG and Valiant Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.