Correlation Between CS Real and BCV Swiss

Can any of the company-specific risk be diversified away by investing in both CS Real and BCV Swiss 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 CS Real and BCV Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CS Real Estate and BCV Swiss Equity, you can compare the effects of market volatilities on CS Real and BCV Swiss 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 CS Real with a short position of BCV Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of CS Real and BCV Swiss.

Diversification Opportunities for CS Real and BCV Swiss

-0.48

Correlation Coefficient

CS Real  BCV Swiss

Very good diversification

The 3 months correlation between SIAT and BCV is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CS Real Estate and BCV Swiss Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCV Swiss Equity and CS Real 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 CS Real Estate are associated (or correlated) with BCV Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCV Swiss Equity has no effect on the direction of CS Real i.e., CS Real and BCV Swiss go up and down completely randomly.

Pair Corralation between CS Real and BCV Swiss

Assuming the 90 days trading horizon CS Real Estate is expected to generate 2.87 times more return on investment than BCV Swiss. However, CS Real is 2.87 times more volatile than BCV Swiss Equity. It trades about 0.09 of its potential returns per unit of risk. BCV Swiss Equity is currently generating about -0.16 per unit of risk. If you would invest  23,900  in CS Real Estate on September 28, 2024 and sell it today you would earn a total of  500.00  from holding CS Real Estate or generate 2.09% return on investment over 90 days.

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

CS Real Estate  vs.  BCV Swiss Equity

CS Real Estate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CS Real Estate are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, CS Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BCV Swiss Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCV Swiss Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong forward indicators, BCV Swiss is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CS Real and BCV Swiss

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

The idea behind CS Real Estate and BCV Swiss Equity 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.