Correlation Between OC Oerlikon and Banque Cantonale

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

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

Diversification Opportunities for OC Oerlikon and Banque Cantonale

0.46

Correlation Coefficient

OC Oerlikon  Banque Cantonale

Very weak diversification

The 3 months correlation between OERL and Banque is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding OC Oerlikon Corp and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and OC Oerlikon 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 OC Oerlikon Corp 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 OC Oerlikon i.e., OC Oerlikon and Banque Cantonale go up and down completely randomly.

Pair Corralation between OC Oerlikon and Banque Cantonale

Assuming the 90 days trading horizon OC Oerlikon Corp is expected to under-perform the Banque Cantonale. But the stock apears to be less risky and, when comparing its historical volatility, OC Oerlikon Corp is 2.47 times less risky than Banque Cantonale. The stock trades about -0.29 of its potential returns per unit of risk. The Banque Cantonale is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  8,715  in Banque Cantonale on September 29, 2024 and sell it today you would lose (390.00) from holding Banque Cantonale or give up 4.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

OC Oerlikon Corp  vs.  Banque Cantonale

OC Oerlikon Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OC Oerlikon Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Banque Cantonale

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banque Cantonale 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 OC Oerlikon and Banque Cantonale

The main advantage of trading using opposite OC Oerlikon and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OC Oerlikon 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 OC Oerlikon Corp and Banque Cantonale 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.