Correlation Between Banque Cantonale and Lyxor MSCI

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

Diversification Opportunities for Banque Cantonale and Lyxor MSCI

-0.72

Correlation Coefficient

Banque Cantonale  Lyxor MSCI

Pay attention - limited upside

The 3 months correlation between Banque and Lyxor is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banque Cantonale du and Lyxor MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI World 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 Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI World has no effect on the direction of Banque Cantonale i.e., Banque Cantonale and Lyxor MSCI go up and down completely randomly.

Pair Corralation between Banque Cantonale and Lyxor MSCI

Assuming the 90 days trading horizon Banque Cantonale du is expected to under-perform the Lyxor MSCI. But the stock apears to be less risky and, when comparing its historical volatility, Banque Cantonale du is 1.88 times less risky than Lyxor MSCI. The stock trades about -0.07 of its potential returns per unit of risk. The Lyxor MSCI World is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  84,600  in Lyxor MSCI World on September 14, 2024 and sell it today you would earn a total of  8,280  from holding Lyxor MSCI World or generate 9.79% return on investment over 90 days.

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

Banque Cantonale du  vs.  Lyxor MSCI World

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.

Lyxor MSCI World

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor MSCI World are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Lyxor MSCI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Banque Cantonale and Lyxor MSCI

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

The idea behind Banque Cantonale du and Lyxor MSCI World 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.