Correlation Between Swissquote Group and Banque Cantonale

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

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

Diversification Opportunities for Swissquote Group and Banque Cantonale

0.32

Correlation Coefficient

Swissquote Group  Banque Cantonale

Weak diversification

The 3 months correlation between Swissquote and Banque is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Swissquote Group Holding and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Swissquote Group 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 Swissquote Group Holding 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 Swissquote Group i.e., Swissquote Group and Banque Cantonale go up and down completely randomly.

Pair Corralation between Swissquote Group and Banque Cantonale

Assuming the 90 days trading horizon Swissquote Group is expected to generate 1.51 times less return on investment than Banque Cantonale. In addition to that, Swissquote Group is 2.68 times more volatile than Banque Cantonale. It trades about 0.07 of its total potential returns per unit of risk. Banque Cantonale is currently generating about 0.27 per unit of volatility. If you would invest  8,495  in Banque Cantonale on December 31, 2024 and sell it today you would earn a total of  1,265  from holding Banque Cantonale or generate 14.89% return on investment over 90 days.

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

Swissquote Group Holding  vs.  Banque Cantonale

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Swissquote Group may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Banque Cantonale

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Banque Cantonale showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swissquote Group and Banque Cantonale

The main advantage of trading using opposite Swissquote Group and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swissquote Group 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 Swissquote Group Holding 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.