Correlation Between Banque Cantonale and IShares Global

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

Diversification Opportunities for Banque Cantonale and IShares Global

0.69

Correlation Coefficient

Banque Cantonale  IShares Global

Poor diversification

The 3 months correlation between Banque and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and IShares Global go up and down completely randomly.

Pair Corralation between Banque Cantonale and IShares Global

Assuming the 90 days trading horizon Banque Cantonale du is expected to generate 0.53 times more return on investment than IShares Global. However, Banque Cantonale du is 1.89 times less risky than IShares Global. It trades about 0.04 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.01 per unit of risk. If you would invest  9,833  in Banque Cantonale du on September 26, 2024 and sell it today you would earn a total of  1,267  from holding Banque Cantonale du or generate 12.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.16%
Values	Daily Returns

Banque Cantonale du  vs.  iShares Global Timber

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.

iShares Global Timber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global Timber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Pair Trading with Banque Cantonale and IShares Global

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

The idea behind Banque Cantonale du and iShares Global Timber 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.