Correlation Between Valiant Holding and Banque Cantonale

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

By analyzing existing cross correlation between Valiant Holding AG and Banque Cantonale du, you can compare the effects of market volatilities on Valiant Holding 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 Valiant Holding with a short position of Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valiant Holding and Banque Cantonale.

Diversification Opportunities for Valiant Holding and Banque Cantonale

-0.8

Correlation Coefficient

Valiant Holding  Banque Cantonale

Pay attention - limited upside

The 3 months correlation between Valiant and Banque is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Holding AG and Banque Cantonale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Valiant Holding 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 Valiant Holding AG 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 Valiant Holding i.e., Valiant Holding and Banque Cantonale go up and down completely randomly.

Pair Corralation between Valiant Holding and Banque Cantonale

Assuming the 90 days trading horizon Valiant Holding AG is expected to generate 1.47 times more return on investment than Banque Cantonale. However, Valiant Holding is 1.47 times more volatile than Banque Cantonale du. It trades about 0.09 of its potential returns per unit of risk. Banque Cantonale du is currently generating about -0.02 per unit of risk. If you would invest  9,870  in Valiant Holding AG on September 23, 2024 and sell it today you would earn a total of  430.00  from holding Valiant Holding AG or generate 4.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Valiant Holding AG  vs.  Banque Cantonale du

Valiant Holding AG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Valiant Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with Valiant Holding and Banque Cantonale

The main advantage of trading using opposite Valiant Holding and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valiant Holding 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 Valiant Holding AG 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.