Correlation Between SPDR Dow and Banque Cantonale

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

By analyzing existing cross correlation between SPDR Dow Jones and Banque Cantonale de, you can compare the effects of market volatilities on SPDR Dow and Banque Cantonale 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 SPDR Dow with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and Banque Cantonale.

Diversification Opportunities for SPDR Dow and Banque Cantonale

0.02

Correlation Coefficient

SPDR Dow  Banque Cantonale

Significant diversification

The 3 months correlation between SPDR and Banque is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and Banque Cantonale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and SPDR Dow 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 SPDR Dow Jones are associated (or correlated) with Banque Cantonale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque Cantonale has no effect on the direction of SPDR Dow i.e., SPDR Dow and Banque Cantonale go up and down completely randomly.

Pair Corralation between SPDR Dow and Banque Cantonale

Assuming the 90 days trading horizon SPDR Dow is expected to generate 2.19 times less return on investment than Banque Cantonale. But when comparing it to its historical volatility, SPDR Dow Jones is 2.46 times less risky than Banque Cantonale. It trades about 0.19 of its potential returns per unit of risk. Banque Cantonale de is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  26,400  in Banque Cantonale de on December 2, 2024 and sell it today you would earn a total of  900.00  from holding Banque Cantonale de or generate 3.41% return on investment over 90 days.

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

SPDR Dow Jones  vs.  Banque Cantonale de

SPDR Dow Jones

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Dow Jones has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPDR Dow is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 12 (%) 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.

Pair Trading with SPDR Dow and Banque Cantonale

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

The idea behind SPDR Dow Jones and Banque Cantonale de 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.