Correlation Between IShares Asia and Banque Cantonale

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

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

Diversification Opportunities for IShares Asia and Banque Cantonale

0.64

Correlation Coefficient

IShares Asia  Banque Cantonale

Poor diversification

The 3 months correlation between IShares and Banque is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia Pacific and Banque Cantonale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and IShares Asia 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 iShares Asia Pacific 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 IShares Asia i.e., IShares Asia and Banque Cantonale go up and down completely randomly.

Pair Corralation between IShares Asia and Banque Cantonale

Assuming the 90 days trading horizon iShares Asia Pacific is expected to under-perform the Banque Cantonale. In addition to that, IShares Asia is 1.37 times more volatile than Banque Cantonale du. It trades about -0.23 of its total potential returns per unit of risk. Banque Cantonale du is currently generating about -0.04 per unit of volatility. If you would invest  11,050  in Banque Cantonale du on October 7, 2024 and sell it today you would lose (50.00) from holding Banque Cantonale du or give up 0.45% of portfolio value over 90 days.

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

iShares Asia Pacific  vs.  Banque Cantonale du

iShares Asia Pacific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Asia Pacific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Banque Cantonale

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banque Cantonale du has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with IShares Asia and Banque Cantonale

The main advantage of trading using opposite IShares Asia and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia 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 iShares Asia Pacific and Banque Cantonale du 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.