Correlation Between Berner Kantonalbank and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank and Compagnie Plastic 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 Berner Kantonalbank and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berner Kantonalbank AG and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Berner Kantonalbank and Compagnie Plastic 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 Berner Kantonalbank with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Compagnie Plastic.
Diversification Opportunities for Berner Kantonalbank and Compagnie Plastic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berner and Compagnie is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Berner 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 Berner Kantonalbank AG are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Berner Kantonalbank i.e., Berner Kantonalbank and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Compagnie Plastic
Assuming the 90 days trading horizon Berner Kantonalbank AG is expected to generate 0.27 times more return on investment than Compagnie Plastic. However, Berner Kantonalbank AG is 3.74 times less risky than Compagnie Plastic. It trades about 0.01 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.01 per unit of risk. If you would invest 23,572 in Berner Kantonalbank AG on November 5, 2024 and sell it today you would earn a total of 728.00 from holding Berner Kantonalbank AG or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.78% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Berner Kantonalbank |
| Compagnie Plastic Omnium |
Berner Kantonalbank and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Compagnie Plastic
The main advantage of trading using opposite Berner Kantonalbank and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Berner Kantonalbank vs. Zoom Video Communications | Berner Kantonalbank vs. mobilezone holding AG | Berner Kantonalbank vs. Charter Communications Cl | Berner Kantonalbank vs. Gamma Communications PLC |
| Compagnie Plastic vs. UNIQA Insurance Group | Compagnie Plastic vs. Moneta Money Bank | Compagnie Plastic vs. Alfa Financial Software | Compagnie Plastic vs. Axway Software SA |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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