Correlation Between Luzerner Kantonalbank and Basler Kantonalbank

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

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

Diversification Opportunities for Luzerner Kantonalbank and Basler Kantonalbank

-0.23

Correlation Coefficient

Luzerner Kantonalbank  Basler Kantonalbank

Very good diversification

The 3 months correlation between Luzerner and Basler is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Luzerner Kantonalbank AG and Basler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basler Kantonalbank and Luzerner 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 Luzerner Kantonalbank AG are associated (or correlated) with Basler Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basler Kantonalbank has no effect on the direction of Luzerner Kantonalbank i.e., Luzerner Kantonalbank and Basler Kantonalbank go up and down completely randomly.

Pair Corralation between Luzerner Kantonalbank and Basler Kantonalbank

Assuming the 90 days trading horizon Luzerner Kantonalbank AG is expected to generate 0.91 times more return on investment than Basler Kantonalbank. However, Luzerner Kantonalbank AG is 1.1 times less risky than Basler Kantonalbank. It trades about 0.21 of its potential returns per unit of risk. Basler Kantonalbank is currently generating about 0.05 per unit of risk. If you would invest  6,790  in Luzerner Kantonalbank AG on April 23, 2025 and sell it today you would earn a total of  670.00  from holding Luzerner Kantonalbank AG or generate 9.87% return on investment over 90 days.

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

Luzerner Kantonalbank AG  vs.  Basler Kantonalbank

Luzerner Kantonalbank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Luzerner Kantonalbank AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Luzerner Kantonalbank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Basler Kantonalbank

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Basler Kantonalbank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Basler Kantonalbank is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Luzerner Kantonalbank and Basler Kantonalbank

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

The idea behind Luzerner Kantonalbank AG and Basler 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.