Correlation Between Banque Cantonale and Graubuendner Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and Graubuendner 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 Banque Cantonale and Graubuendner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banque Cantonale and Graubuendner Kantonalbank, you can compare the effects of market volatilities on Banque Cantonale and Graubuendner 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 Banque Cantonale with a short position of Graubuendner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Graubuendner Kantonalbank.
Diversification Opportunities for Banque Cantonale and Graubuendner Kantonalbank
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banque and Graubuendner is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale and Graubuendner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graubuendner Kantonalbank and Banque Cantonale 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 Banque Cantonale are associated (or correlated) with Graubuendner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graubuendner Kantonalbank has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Graubuendner Kantonalbank go up and down completely randomly.
Pair Corralation between Banque Cantonale and Graubuendner Kantonalbank
Assuming the 90 days trading horizon Banque Cantonale is expected to generate 1.59 times more return on investment than Graubuendner Kantonalbank. However, Banque Cantonale is 1.59 times more volatile than Graubuendner Kantonalbank. It trades about 0.08 of its potential returns per unit of risk. Graubuendner Kantonalbank is currently generating about 0.03 per unit of risk. If you would invest 8,610 in Banque Cantonale on September 1, 2024 and sell it today you would earn a total of 135.00 from holding Banque Cantonale or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banque Cantonale vs. Graubuendner Kantonalbank
Performance |
| Timeline |
| Banque Cantonale |
| Graubuendner Kantonalbank |
Banque Cantonale and Graubuendner Kantonalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banque Cantonale and Graubuendner Kantonalbank
The main advantage of trading using opposite Banque Cantonale and Graubuendner Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Cantonale position performs unexpectedly, Graubuendner 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 Graubuendner Kantonalbank will offset losses from the drop in Graubuendner Kantonalbank's long position.| Banque Cantonale vs. Helvetia Holding AG | Banque Cantonale vs. Cembra Money Bank | Banque Cantonale vs. Swisscom AG | Banque Cantonale vs. Swiss Life Holding |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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