Correlation Between Banque Cantonale and Amundi Index

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

Diversification Opportunities for Banque Cantonale and Amundi Index

-0.84

Correlation Coefficient

Banque Cantonale  Amundi Index

Pay attention - limited upside

The 3 months correlation between Banque and Amundi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Amundi Index go up and down completely randomly.

Pair Corralation between Banque Cantonale and Amundi Index

Assuming the 90 days trading horizon Banque Cantonale du is expected to under-perform the Amundi Index. But the stock apears to be less risky and, when comparing its historical volatility, Banque Cantonale du is 1.22 times less risky than Amundi Index. The stock trades about -0.17 of its potential returns per unit of risk. The Amundi Index Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  11,506  in Amundi Index Solutions on September 17, 2024 and sell it today you would earn a total of  414.00  from holding Amundi Index Solutions or generate 3.6% return on investment over 90 days.

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

Banque Cantonale du  vs.  Amundi Index Solutions

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.

Amundi Index Solutions

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Amundi Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Banque Cantonale and Amundi Index

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

The idea behind Banque Cantonale du and Amundi Index Solutions 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.