Correlation Between Elma Electronic and Banque Cantonale
Can any of the company-specific risk be diversified away by investing in both Elma Electronic and Banque Cantonale 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 Elma Electronic and Banque Cantonale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elma Electronic AG and Banque Cantonale du, you can compare the effects of market volatilities on Elma Electronic and Banque Cantonale 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 Elma Electronic with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elma Electronic and Banque Cantonale.
Diversification Opportunities for Elma Electronic and Banque Cantonale
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elma and Banque is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Elma Electronic AG and Banque Cantonale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Elma Electronic 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 Elma Electronic AG are associated (or correlated) with Banque Cantonale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque Cantonale has no effect on the direction of Elma Electronic i.e., Elma Electronic and Banque Cantonale go up and down completely randomly.
Pair Corralation between Elma Electronic and Banque Cantonale
Assuming the 90 days trading horizon Elma Electronic is expected to generate 1.65 times less return on investment than Banque Cantonale. But when comparing it to its historical volatility, Elma Electronic AG is 1.56 times less risky than Banque Cantonale. It trades about 0.17 of its potential returns per unit of risk. Banque Cantonale du is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 11,100 in Banque Cantonale du on November 7, 2024 and sell it today you would earn a total of 350.00 from holding Banque Cantonale du or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Elma Electronic AG vs. Banque Cantonale du
Performance |
| Timeline |
| Elma Electronic AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Banque Cantonale |
Elma Electronic and Banque Cantonale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elma Electronic and Banque Cantonale
The main advantage of trading using opposite Elma Electronic and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elma Electronic position performs unexpectedly, Banque Cantonale 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 Banque Cantonale will offset losses from the drop in Banque Cantonale's long position.| Elma Electronic vs. Carlo Gavazzi Holding | Elma Electronic vs. Feintool International Holding | Elma Electronic vs. Graubuendner Kantonalbank | Elma Electronic vs. Also Holding AG |
| Banque Cantonale vs. Swissquote Group Holding | Banque Cantonale vs. Banque Cantonale | Banque Cantonale vs. Barry Callebaut AG | Banque Cantonale vs. Vontobel 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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