Correlation Between Swisscom and Banque Cantonale
Can any of the company-specific risk be diversified away by investing in both Swisscom 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 Swisscom and Banque Cantonale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swisscom AG and Banque Cantonale, you can compare the effects of market volatilities on Swisscom 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 Swisscom with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swisscom and Banque Cantonale.
Diversification Opportunities for Swisscom and Banque Cantonale
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swisscom and Banque is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Swisscom AG and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Swisscom 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 Swisscom 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 Swisscom i.e., Swisscom and Banque Cantonale go up and down completely randomly.
Pair Corralation between Swisscom and Banque Cantonale
Assuming the 90 days trading horizon Swisscom AG is expected to under-perform the Banque Cantonale. But the stock apears to be less risky and, when comparing its historical volatility, Swisscom AG is 1.91 times less risky than Banque Cantonale. The stock trades about -0.18 of its potential returns per unit of risk. The Banque Cantonale is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,870 in Banque Cantonale on October 25, 2024 and sell it today you would earn a total of 75.00 from holding Banque Cantonale or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Swisscom AG vs. Banque Cantonale
Performance |
| Timeline |
| Swisscom AG |
| Banque Cantonale |
Swisscom and Banque Cantonale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swisscom and Banque Cantonale
The main advantage of trading using opposite Swisscom and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swisscom 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.| Swisscom vs. Swiss Life Holding | Swisscom vs. Zurich Insurance Group | Swisscom vs. Swiss Re AG | Swisscom vs. ABB |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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