Correlation Between Basler Kantonalbank and Banque Cantonale

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Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and Banque Cantonale 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 Basler Kantonalbank and Banque Cantonale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basler Kantonalbank and Banque Cantonale du, you can compare the effects of market volatilities on Basler Kantonalbank and Banque Cantonale 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 Basler Kantonalbank with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and Banque Cantonale.

Diversification Opportunities for Basler Kantonalbank and Banque Cantonale

BaslerBanqueDiversified AwayBaslerBanqueDiversified Away100%
-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Basler and Banque is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and Banque Cantonale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Basler Kantonalbank 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 Basler Kantonalbank are associated (or correlated) with Banque Cantonale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque Cantonale has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and Banque Cantonale go up and down completely randomly.

Pair Corralation between Basler Kantonalbank and Banque Cantonale

Assuming the 90 days trading horizon Basler Kantonalbank is expected to generate 1.26 times more return on investment than Banque Cantonale. However, Basler Kantonalbank is 1.26 times more volatile than Banque Cantonale du. It trades about 0.08 of its potential returns per unit of risk. Banque Cantonale du is currently generating about -0.07 per unit of risk. If you would invest  6,580  in Basler Kantonalbank on September 15, 2024 and sell it today you would earn a total of  220.00  from holding Basler Kantonalbank or generate 3.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Basler Kantonalbank  vs.  Banque Cantonale du

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -2024
JavaScript chart by amCharts 3.21.15BSKP WKBN
       Timeline  
Basler Kantonalbank 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Basler Kantonalbank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Basler Kantonalbank is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6565.56666.56767.56868.569
Banque Cantonale 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec109110111112113114

Basler Kantonalbank and Banque Cantonale Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.94-1.43-0.92-0.410.05160.541.051.562.07 0.51.01.5
JavaScript chart by amCharts 3.21.15BSKP WKBN
       Returns  

Pair Trading with Basler Kantonalbank and Banque Cantonale

The main advantage of trading using opposite Basler Kantonalbank and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, Banque Cantonale 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 Banque Cantonale will offset losses from the drop in Banque Cantonale's long position.
The idea behind Basler Kantonalbank and Banque Cantonale du 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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