Correlation Between Banque Cantonale and Zurich Invest

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

Diversification Opportunities for Banque Cantonale and Zurich Invest

-0.37

Correlation Coefficient

Banque Cantonale  Zurich Invest

Very good diversification

The 3 months correlation between Banque and Zurich is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Zurich Invest II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Invest II 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 Zurich Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Invest II has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Zurich Invest go up and down completely randomly.

Pair Corralation between Banque Cantonale and Zurich Invest

Assuming the 90 days trading horizon Banque Cantonale du is expected to under-perform the Zurich Invest. In addition to that, Banque Cantonale is 3.8 times more volatile than Zurich Invest II. It trades about -0.09 of its total potential returns per unit of risk. Zurich Invest II is currently generating about 0.2 per unit of volatility. If you would invest  871.00  in Zurich Invest II on September 20, 2024 and sell it today you would earn a total of  6.00  from holding Zurich Invest II or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Banque Cantonale du  vs.  Zurich Invest II

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.

Zurich Invest II

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Invest II are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Zurich Invest is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Banque Cantonale and Zurich Invest

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

The idea behind Banque Cantonale du and Zurich Invest II 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..