Correlation Between Banque Cantonale and CSIF III

Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and CSIF III 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 CSIF III 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 CSIF III Real, you can compare the effects of market volatilities on Banque Cantonale and CSIF III 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 CSIF III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and CSIF III.

Diversification Opportunities for Banque Cantonale and CSIF III

0.04

Correlation Coefficient

Banque Cantonale  CSIF III

Significant diversification

The 3 months correlation between Banque and CSIF is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and CSIF III Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF III Real 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 CSIF III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF III Real has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and CSIF III go up and down completely randomly.

Pair Corralation between Banque Cantonale and CSIF III

Assuming the 90 days trading horizon Banque Cantonale du is expected to generate 0.7 times more return on investment than CSIF III. However, Banque Cantonale du is 1.44 times less risky than CSIF III. It trades about 0.04 of its potential returns per unit of risk. CSIF III Real is currently generating about 0.02 per unit of risk. If you would invest  9,879  in Banque Cantonale du on September 28, 2024 and sell it today you would earn a total of  1,121  from holding Banque Cantonale du or generate 11.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

Banque Cantonale du  vs.  CSIF III Real

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.

CSIF III Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSIF III Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, CSIF III is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banque Cantonale and CSIF III

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

The idea behind Banque Cantonale du and CSIF III Real 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.