Correlation Between Banque Cantonale and Graubuendner Kantonalbank

Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and Graubuendner Kantonalbank 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 Graubuendner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banque Cantonale de and Graubuendner Kantonalbank, you can compare the effects of market volatilities on Banque Cantonale and Graubuendner Kantonalbank 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 Graubuendner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Graubuendner Kantonalbank.

Diversification Opportunities for Banque Cantonale and Graubuendner Kantonalbank

0.68

Correlation Coefficient

Banque Cantonale  Graubuendner Kantonalbank

Poor diversification

The 3 months correlation between Banque and Graubuendner is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale de and Graubuendner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graubuendner Kantonalbank 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 de are associated (or correlated) with Graubuendner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graubuendner Kantonalbank has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Graubuendner Kantonalbank go up and down completely randomly.

Pair Corralation between Banque Cantonale and Graubuendner Kantonalbank

Assuming the 90 days trading horizon Banque Cantonale de is expected to generate 1.38 times more return on investment than Graubuendner Kantonalbank. However, Banque Cantonale is 1.38 times more volatile than Graubuendner Kantonalbank. It trades about 0.21 of its potential returns per unit of risk. Graubuendner Kantonalbank is currently generating about 0.04 per unit of risk. If you would invest  26,000  in Banque Cantonale de on November 28, 2024 and sell it today you would earn a total of  1,200  from holding Banque Cantonale de or generate 4.62% return on investment over 90 days.

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

Banque Cantonale de  vs.  Graubuendner Kantonalbank

Banque Cantonale

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale de are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Banque Cantonale may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Graubuendner Kantonalbank

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graubuendner Kantonalbank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Graubuendner Kantonalbank is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Banque Cantonale and Graubuendner Kantonalbank

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

The idea behind Banque Cantonale de and Graubuendner Kantonalbank 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.