Correlation Between Banque Cantonale and Invesco EQQQ

Can any of the company-specific risk be diversified away by investing in both Banque Cantonale and Invesco EQQQ 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 Invesco EQQQ 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 Invesco EQQQ NASDAQ 100, you can compare the effects of market volatilities on Banque Cantonale and Invesco EQQQ 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 Invesco EQQQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Cantonale and Invesco EQQQ.

Diversification Opportunities for Banque Cantonale and Invesco EQQQ

-0.77

Correlation Coefficient

Banque Cantonale  Invesco EQQQ

Pay attention - limited upside

The 3 months correlation between Banque and Invesco is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Invesco EQQQ NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EQQQ NASDAQ 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 Invesco EQQQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EQQQ NASDAQ has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Invesco EQQQ go up and down completely randomly.

Pair Corralation between Banque Cantonale and Invesco EQQQ

Assuming the 90 days trading horizon Banque Cantonale du is expected to under-perform the Invesco EQQQ. But the stock apears to be less risky and, when comparing its historical volatility, Banque Cantonale du is 1.79 times less risky than Invesco EQQQ. The stock trades about -0.05 of its potential returns per unit of risk. The Invesco EQQQ NASDAQ 100 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  33,190  in Invesco EQQQ NASDAQ 100 on September 13, 2024 and sell it today you would earn a total of  3,810  from holding Invesco EQQQ NASDAQ 100 or generate 11.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Banque Cantonale du  vs.  Invesco EQQQ NASDAQ 100

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.

Invesco EQQQ NASDAQ

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco EQQQ NASDAQ 100 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Invesco EQQQ may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Banque Cantonale and Invesco EQQQ

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

The idea behind Banque Cantonale du and Invesco EQQQ NASDAQ 100 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.