Correlation Between Barry Callebaut and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Barry Callebaut and Sulzer AG 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 Barry Callebaut and Sulzer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barry Callebaut AG and Sulzer AG, you can compare the effects of market volatilities on Barry Callebaut and Sulzer AG 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 Barry Callebaut with a short position of Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Sulzer AG.
Diversification Opportunities for Barry Callebaut and Sulzer AG
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barry and Sulzer is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG and Barry Callebaut 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 Barry Callebaut AG are associated (or correlated) with Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Barry Callebaut i.e., Barry Callebaut and Sulzer AG go up and down completely randomly.
Pair Corralation between Barry Callebaut and Sulzer AG
Assuming the 90 days trading horizon Barry Callebaut AG is expected to under-perform the Sulzer AG. In addition to that, Barry Callebaut is 1.08 times more volatile than Sulzer AG. It trades about -0.06 of its total potential returns per unit of risk. Sulzer AG is currently generating about 0.03 per unit of volatility. If you would invest 12,280 in Sulzer AG on August 29, 2024 and sell it today you would earn a total of 620.00 from holding Sulzer AG or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barry Callebaut AG vs. Sulzer AG
Performance |
| Timeline |
| Barry Callebaut AG |
| Sulzer AG |
Barry Callebaut and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barry Callebaut and Sulzer AG
The main advantage of trading using opposite Barry Callebaut and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG's long position.| Barry Callebaut vs. Santhera Pharmaceuticals Holding | Barry Callebaut vs. Newron Pharmaceuticals SpA | Barry Callebaut vs. Basilea Pharmaceutica AG | Barry Callebaut vs. Evolva Holding SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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