Correlation Between Swiss Life and Banque Cantonale
Can any of the company-specific risk be diversified away by investing in both Swiss Life 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 Swiss Life and Banque Cantonale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Life Holding and Banque Cantonale, you can compare the effects of market volatilities on Swiss Life 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 Swiss Life with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Banque Cantonale.
Diversification Opportunities for Swiss Life and Banque Cantonale
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swiss and Banque is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Swiss Life 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 Swiss Life Holding 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 Swiss Life i.e., Swiss Life and Banque Cantonale go up and down completely randomly.
Pair Corralation between Swiss Life and Banque Cantonale
Assuming the 90 days trading horizon Swiss Life is expected to generate 1.27 times less return on investment than Banque Cantonale. But when comparing it to its historical volatility, Swiss Life Holding is 1.81 times less risky than Banque Cantonale. It trades about 0.13 of its potential returns per unit of risk. Banque Cantonale is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,725 in Banque Cantonale on November 27, 2024 and sell it today you would earn a total of 760.00 from holding Banque Cantonale or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. Banque Cantonale
Performance |
| Timeline |
| Swiss Life Holding |
| Banque Cantonale |
Swiss Life and Banque Cantonale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and Banque Cantonale
The main advantage of trading using opposite Swiss Life and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life 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.| Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Swiss Re AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Lonza Group AG |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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