Correlation Between Banque Cantonale and Schweizerische Nationalbank
Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and Schweizerische Nationalbank 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 Schweizerische Nationalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banque Cantonale du and Schweizerische Nationalbank, you can compare the effects of market volatilities on Banque Cantonale and Schweizerische Nationalbank 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 Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Schweizerische Nationalbank.
Diversification Opportunities for Banque Cantonale and Schweizerische Nationalbank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banque and Schweizerische is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank 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 du are associated (or correlated) with Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Schweizerische Nationalbank go up and down completely randomly.
Pair Corralation between Banque Cantonale and Schweizerische Nationalbank
Assuming the 90 days trading horizon Banque Cantonale is expected to generate 7.79 times less return on investment than Schweizerische Nationalbank. But when comparing it to its historical volatility, Banque Cantonale du is 2.68 times less risky than Schweizerische Nationalbank. It trades about 0.16 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 319,000 in Schweizerische Nationalbank on October 25, 2024 and sell it today you would earn a total of 48,000 from holding Schweizerische Nationalbank or generate 15.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banque Cantonale du vs. Schweizerische Nationalbank
Performance |
| Timeline |
| Banque Cantonale |
| Schweizerische Nationalbank |
Banque Cantonale and Schweizerische Nationalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banque Cantonale and Schweizerische Nationalbank
The main advantage of trading using opposite Banque Cantonale and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Cantonale position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank's long position.| Banque Cantonale vs. Basler Kantonalbank | Banque Cantonale vs. mobilezone ag | Banque Cantonale vs. Hypothekarbank Lenzburg AG | Banque Cantonale vs. Berner Kantonalbank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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