Correlation Between Banque Cantonale and Implenia

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

Diversification Opportunities for Banque Cantonale and Implenia

0.26

Correlation Coefficient

Banque Cantonale  Implenia

Modest diversification

The 3 months correlation between Banque and Implenia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale de and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG 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 Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Implenia go up and down completely randomly.

Pair Corralation between Banque Cantonale and Implenia

Assuming the 90 days trading horizon Banque Cantonale is expected to generate 14.59 times less return on investment than Implenia. But when comparing it to its historical volatility, Banque Cantonale de is 2.46 times less risky than Implenia. It trades about 0.04 of its potential returns per unit of risk. Implenia AG is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  3,006  in Implenia AG on December 29, 2024 and sell it today you would earn a total of  1,079  from holding Implenia AG or generate 35.89% return on investment over 90 days.

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

Banque Cantonale de  vs.  Implenia AG

Banque Cantonale

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale de are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Banque Cantonale is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Implenia AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banque Cantonale and Implenia

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

The idea behind Banque Cantonale de and Implenia AG 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.

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