Correlation Between BCV Swiss and LO Funds

Can any of the company-specific risk be diversified away by investing in both BCV Swiss and LO Funds 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 BCV Swiss and LO Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BCV Swiss Franc and LO Funds Swiss, you can compare the effects of market volatilities on BCV Swiss and LO Funds 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 BCV Swiss with a short position of LO Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCV Swiss and LO Funds.

Diversification Opportunities for BCV Swiss and LO Funds

-0.72

Correlation Coefficient

BCV Swiss  LO Funds

Pay attention - limited upside

The 3 months correlation between BCV and 0P00001R8Q is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BCV Swiss Franc and LO Funds Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LO Funds Swiss and BCV Swiss 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 BCV Swiss Franc are associated (or correlated) with LO Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LO Funds Swiss has no effect on the direction of BCV Swiss i.e., BCV Swiss and LO Funds go up and down completely randomly.

Pair Corralation between BCV Swiss and LO Funds

Assuming the 90 days trading horizon BCV Swiss Franc is expected to generate 0.18 times more return on investment than LO Funds. However, BCV Swiss Franc is 5.49 times less risky than LO Funds. It trades about 0.11 of its potential returns per unit of risk. LO Funds Swiss is currently generating about -0.18 per unit of risk. If you would invest  10,719  in BCV Swiss Franc on September 26, 2024 and sell it today you would earn a total of  26.00  from holding BCV Swiss Franc or generate 0.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BCV Swiss Franc  vs.  LO Funds Swiss

BCV Swiss Franc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BCV Swiss Franc are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, BCV Swiss is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

LO Funds Swiss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LO Funds Swiss has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with BCV Swiss and LO Funds

The main advantage of trading using opposite BCV Swiss and LO Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCV Swiss position performs unexpectedly, LO Funds 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 LO Funds will offset losses from the drop in LO Funds' long position.

The idea behind BCV Swiss Franc and LO Funds Swiss pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.