Correlation Between Banque Cantonale and VP Bank
Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and VP Bank 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 VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banque Cantonale and VP Bank AG, you can compare the effects of market volatilities on Banque Cantonale and VP Bank 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 VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and VP Bank.
Diversification Opportunities for Banque Cantonale and VP Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banque and VPBN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG 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 VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and VP Bank go up and down completely randomly.
Pair Corralation between Banque Cantonale and VP Bank
Assuming the 90 days trading horizon Banque Cantonale is expected to generate 1.26 times less return on investment than VP Bank. In addition to that, Banque Cantonale is 1.86 times more volatile than VP Bank AG. It trades about 0.07 of its total potential returns per unit of risk. VP Bank AG is currently generating about 0.17 per unit of volatility. If you would invest 7,580 in VP Bank AG on November 3, 2024 and sell it today you would earn a total of 540.00 from holding VP Bank AG or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banque Cantonale vs. VP Bank AG
Performance |
| Timeline |
| Banque Cantonale |
| VP Bank AG |
Banque Cantonale and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banque Cantonale and VP Bank
The main advantage of trading using opposite Banque Cantonale and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Cantonale position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank'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 |
| VP Bank vs. Liechtensteinische Landesbank AG | VP Bank vs. Leonteq AG | VP Bank vs. Helvetia Holding AG | VP Bank vs. Valiant Holding AG |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |