Correlation Between Banque Cantonale and LO Funds

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

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

Diversification Opportunities for Banque Cantonale and LO Funds

0.82

Correlation Coefficient

Banque Cantonale  LO Funds

Very poor diversification

The 3 months correlation between Banque and 0P00001R8Q is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and LO Funds Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LO Funds Swiss and Banque Cantonale 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 Banque Cantonale du are associated (or correlated) with LO Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LO Funds Swiss has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and LO Funds go up and down completely randomly.

Pair Corralation between Banque Cantonale and LO Funds

Assuming the 90 days trading horizon Banque Cantonale du is expected to generate 0.76 times more return on investment than LO Funds. However, Banque Cantonale du is 1.32 times less risky than LO Funds. It trades about 0.33 of its potential returns per unit of risk. LO Funds Swiss is currently generating about 0.15 per unit of risk. If you would invest  10,850  in Banque Cantonale du on October 16, 2024 and sell it today you would earn a total of  300.00  from holding Banque Cantonale du or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.33%
Values	Daily Returns

Banque Cantonale du  vs.  LO Funds Swiss

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.

LO Funds Swiss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LO Funds Swiss has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, LO Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banque Cantonale and LO Funds

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

The idea behind Banque Cantonale du and LO Funds Swiss 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.