Correlation Between Vontobel Holding and Banque Cantonale

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

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

Diversification Opportunities for Vontobel Holding and Banque Cantonale

-0.09

Correlation Coefficient

Vontobel Holding  Banque Cantonale

Good diversification

The 3 months correlation between Vontobel and Banque is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vontobel Holding and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Vontobel Holding 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 Vontobel 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 Vontobel Holding i.e., Vontobel Holding and Banque Cantonale go up and down completely randomly.

Pair Corralation between Vontobel Holding and Banque Cantonale

Assuming the 90 days trading horizon Vontobel Holding is expected to generate 0.94 times more return on investment than Banque Cantonale. However, Vontobel Holding is 1.07 times less risky than Banque Cantonale. It trades about 0.1 of its potential returns per unit of risk. Banque Cantonale is currently generating about -0.06 per unit of risk. If you would invest  4,690  in Vontobel Holding on September 14, 2024 and sell it today you would earn a total of  1,560  from holding Vontobel Holding or generate 33.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Vontobel Holding  vs.  Banque Cantonale

Vontobel Holding

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vontobel Holding are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vontobel Holding showed solid returns over the last few months and may actually be approaching a breakup point.

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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Vontobel Holding and Banque Cantonale

The main advantage of trading using opposite Vontobel Holding and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vontobel Holding 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 Vontobel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.