Correlation Between Banque Cantonale and Swissquote Group

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

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

Diversification Opportunities for Banque Cantonale and Swissquote Group

0.78

Correlation Coefficient

Banque Cantonale  Swissquote Group

Poor diversification

The 3 months correlation between Banque and Swissquote is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale and Swissquote Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swissquote Group Holding 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 Swissquote Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swissquote Group Holding has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Swissquote Group go up and down completely randomly.

Pair Corralation between Banque Cantonale and Swissquote Group

Assuming the 90 days trading horizon Banque Cantonale is expected to generate 3.48 times less return on investment than Swissquote Group. But when comparing it to its historical volatility, Banque Cantonale is 1.61 times less risky than Swissquote Group. It trades about 0.05 of its potential returns per unit of risk. Swissquote Group Holding is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  15,316  in Swissquote Group Holding on December 4, 2024 and sell it today you would earn a total of  21,084  from holding Swissquote Group Holding or generate 137.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Banque Cantonale  vs.  Swissquote Group Holding

Banque Cantonale

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale are ranked lower than 8 (%) 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 April 2025.

Swissquote Group Holding

Risk-Adjusted Performance

Modest

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

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

The idea behind Banque Cantonale and Swissquote Group Holding 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.