Correlation Between BCV Swiss and Immofonds

Can any of the company-specific risk be diversified away by investing in both BCV Swiss and Immofonds 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 Immofonds 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 Immofonds, you can compare the effects of market volatilities on BCV Swiss and Immofonds 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 Immofonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCV Swiss and Immofonds.

Diversification Opportunities for BCV Swiss and Immofonds

0.93

Correlation Coefficient

BCV Swiss  Immofonds

Almost no diversification

The 3 months correlation between BCV and Immofonds is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BCV Swiss Franc and Immofonds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofonds 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 Immofonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofonds has no effect on the direction of BCV Swiss i.e., BCV Swiss and Immofonds go up and down completely randomly.

Pair Corralation between BCV Swiss and Immofonds

Assuming the 90 days trading horizon BCV Swiss is expected to generate 15.07 times less return on investment than Immofonds. But when comparing it to its historical volatility, BCV Swiss Franc is 7.1 times less risky than Immofonds. It trades about 0.11 of its potential returns per unit of risk. Immofonds is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  57,000  in Immofonds on September 26, 2024 and sell it today you would earn a total of  2,200  from holding Immofonds or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

BCV Swiss Franc  vs.  Immofonds

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.

Immofonds

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Immofonds are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Immofonds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BCV Swiss and Immofonds

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

The idea behind BCV Swiss Franc and Immofonds 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.