Correlation Between Banque Cantonale and Ams AG

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

Diversification Opportunities for Banque Cantonale and Ams AG

0.71

Correlation Coefficient

Banque Cantonale  Ams AG

Poor diversification

The 3 months correlation between Banque and Ams is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG 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 Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Ams AG go up and down completely randomly.

Pair Corralation between Banque Cantonale and Ams AG

Assuming the 90 days trading horizon Banque Cantonale is expected to generate 5.28 times less return on investment than Ams AG. But when comparing it to its historical volatility, Banque Cantonale du is 6.42 times less risky than Ams AG. It trades about 0.17 of its potential returns per unit of risk. Ams AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  619.00  in Ams AG on December 26, 2024 and sell it today you would earn a total of  222.00  from holding Ams AG or generate 35.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Banque Cantonale du  vs.  Ams AG

Banque Cantonale

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale du are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Banque Cantonale may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ams AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ams AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ams AG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banque Cantonale and Ams AG

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

The idea behind Banque Cantonale du and Ams AG 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.