Correlation Between Banque Cantonale and Barry Callebaut

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

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

Diversification Opportunities for Banque Cantonale and Barry Callebaut

-0.38

Correlation Coefficient

Banque Cantonale  Barry Callebaut

Very good diversification

The 3 months correlation between Banque and Barry is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut 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 are associated (or correlated) with Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Barry Callebaut go up and down completely randomly.

Pair Corralation between Banque Cantonale and Barry Callebaut

Assuming the 90 days trading horizon Banque Cantonale is expected to generate 0.42 times more return on investment than Barry Callebaut. However, Banque Cantonale is 2.4 times less risky than Barry Callebaut. It trades about 0.29 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about 0.03 per unit of risk. If you would invest  8,325  in Banque Cantonale on December 24, 2024 and sell it today you would earn a total of  1,335  from holding Banque Cantonale or generate 16.04% return on investment over 90 days.

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

Banque Cantonale  vs.  Barry Callebaut AG

Banque Cantonale

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Banque Cantonale showed solid returns over the last few months and may actually be approaching a breakup point.

Barry Callebaut AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Barry Callebaut AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Barry Callebaut 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 Barry Callebaut

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

The idea behind Banque Cantonale and Barry Callebaut 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.