Correlation Between Swiss Leader and Banque Cantonale
Can any of the company-specific risk be diversified away by investing in both Swiss Leader 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 Leader 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 Leader Price and Banque Cantonale de, you can compare the effects of market volatilities on Swiss Leader 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 Leader with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Banque Cantonale.
Diversification Opportunities for Swiss Leader and Banque Cantonale
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swiss and Banque is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and Banque Cantonale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Swiss Leader 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 Leader Price 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 Leader i.e., Swiss Leader and Banque Cantonale go up and down completely randomly.
Pair Corralation between Swiss Leader and Banque Cantonale
Assuming the 90 days trading horizon Swiss Leader Price is expected to under-perform the Banque Cantonale. But the index apears to be less risky and, when comparing its historical volatility, Swiss Leader Price is 1.34 times less risky than Banque Cantonale. The index trades about -0.13 of its potential returns per unit of risk. The Banque Cantonale de is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 26,000 in Banque Cantonale de on August 28, 2024 and sell it today you would lose (1,100) from holding Banque Cantonale de or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. Banque Cantonale de
Performance |
| Timeline |
Swiss Leader and Banque Cantonale Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Banque Cantonale de
Pair trading matchups for Banque Cantonale
Pair Trading with Swiss Leader and Banque Cantonale
The main advantage of trading using opposite Swiss Leader and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader 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 Leader vs. Liechtensteinische Landesbank AG | Swiss Leader vs. BB Biotech AG | Swiss Leader vs. Luzerner Kantonalbank AG | Swiss Leader vs. Swiss Steel Holding |
| Banque Cantonale vs. Banque Cantonale | Banque Cantonale vs. Luzerner Kantonalbank AG | Banque Cantonale vs. Berner Kantonalbank AG | Banque Cantonale vs. Basler Kantonalbank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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