Correlation Between Givaudan and Alien Metals
Can any of the company-specific risk be diversified away by investing in both Givaudan and Alien Metals 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 Givaudan and Alien Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Alien Metals, you can compare the effects of market volatilities on Givaudan and Alien Metals 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 Givaudan with a short position of Alien Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Alien Metals.
Diversification Opportunities for Givaudan and Alien Metals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Givaudan and Alien is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Alien Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alien Metals and Givaudan 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 Givaudan SA are associated (or correlated) with Alien Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alien Metals has no effect on the direction of Givaudan i.e., Givaudan and Alien Metals go up and down completely randomly.
Pair Corralation between Givaudan and Alien Metals
Assuming the 90 days trading horizon Givaudan SA is expected to generate 0.16 times more return on investment than Alien Metals. However, Givaudan SA is 6.45 times less risky than Alien Metals. It trades about -0.03 of its potential returns per unit of risk. Alien Metals is currently generating about -0.09 per unit of risk. If you would invest 396,800 in Givaudan SA on October 25, 2024 and sell it today you would lose (1,850) from holding Givaudan SA or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Givaudan SA vs. Alien Metals
Performance |
| Timeline |
| Givaudan SA |
| Alien Metals |
Givaudan and Alien Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Alien Metals
The main advantage of trading using opposite Givaudan and Alien Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan position performs unexpectedly, Alien Metals 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 Alien Metals will offset losses from the drop in Alien Metals' long position.| Givaudan vs. MyHealthChecked Plc | Givaudan vs. Aeorema Communications Plc | Givaudan vs. Planet Fitness Cl | Givaudan vs. Abingdon Health Plc |
| Alien Metals vs. Lundin Mining Corp | Alien Metals vs. Empire Metals Limited | Alien Metals vs. Software Circle plc | Alien Metals vs. Europa Metals |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |