Correlation Between Carlo Gavazzi and Banque Cantonale

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

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

Diversification Opportunities for Carlo Gavazzi and Banque Cantonale

-0.56

Correlation Coefficient

Carlo Gavazzi  Banque Cantonale

Excellent diversification

The 3 months correlation between Carlo and Banque is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Carlo Gavazzi Holding and Banque Cantonale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale and Carlo Gavazzi 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 Carlo Gavazzi Holding 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 Carlo Gavazzi i.e., Carlo Gavazzi and Banque Cantonale go up and down completely randomly.

Pair Corralation between Carlo Gavazzi and Banque Cantonale

Assuming the 90 days trading horizon Carlo Gavazzi Holding is expected to generate 3.48 times more return on investment than Banque Cantonale. However, Carlo Gavazzi is 3.48 times more volatile than Banque Cantonale. It trades about 0.03 of its potential returns per unit of risk. Banque Cantonale is currently generating about 0.04 per unit of risk. If you would invest  19,350  in Carlo Gavazzi Holding on April 23, 2025 and sell it today you would earn a total of  500.00  from holding Carlo Gavazzi Holding or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.44%
Values	Daily Returns

Carlo Gavazzi Holding  vs.  Banque Cantonale

Carlo Gavazzi Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carlo Gavazzi Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Carlo Gavazzi 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

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banque Cantonale are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Carlo Gavazzi and Banque Cantonale

The main advantage of trading using opposite Carlo Gavazzi and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlo Gavazzi 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 Carlo Gavazzi Holding and Banque Cantonale 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.