Correlation Between Banque Cantonale and Glarner Kantonalbank

Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and Glarner Kantonalbank 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 Glarner Kantonalbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banque Cantonale de and Glarner Kantonalbank, you can compare the effects of market volatilities on Banque Cantonale and Glarner Kantonalbank 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 Glarner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Glarner Kantonalbank.

Diversification Opportunities for Banque Cantonale and Glarner Kantonalbank

0.3

Correlation Coefficient

Banque Cantonale  Glarner Kantonalbank

Weak diversification

The 3 months correlation between Banque and Glarner is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale de and Glarner Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glarner Kantonalbank 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 de are associated (or correlated) with Glarner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glarner Kantonalbank has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Glarner Kantonalbank go up and down completely randomly.

Pair Corralation between Banque Cantonale and Glarner Kantonalbank

Assuming the 90 days trading horizon Banque Cantonale de is expected to generate 1.69 times more return on investment than Glarner Kantonalbank. However, Banque Cantonale is 1.69 times more volatile than Glarner Kantonalbank. It trades about 0.05 of its potential returns per unit of risk. Glarner Kantonalbank is currently generating about -0.03 per unit of risk. If you would invest  21,444  in Banque Cantonale de on September 12, 2024 and sell it today you would earn a total of  4,356  from holding Banque Cantonale de or generate 20.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Banque Cantonale de  vs.  Glarner Kantonalbank

Banque Cantonale

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banque Cantonale de 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.

Glarner Kantonalbank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glarner Kantonalbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Glarner Kantonalbank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Banque Cantonale and Glarner Kantonalbank

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

The idea behind Banque Cantonale de and Glarner Kantonalbank 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.