Correlation Between Bell AG and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Bell AG and Emmi 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 Bell AG and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell AG and Emmi AG, you can compare the effects of market volatilities on Bell AG and Emmi 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 Bell AG with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell AG and Emmi AG.
Diversification Opportunities for Bell AG and Emmi AG
Good diversification
The 3 months correlation between Bell and Emmi is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bell AG and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Bell AG 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 Bell AG are associated (or correlated) with Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Bell AG i.e., Bell AG and Emmi AG go up and down completely randomly.
Pair Corralation between Bell AG and Emmi AG
Assuming the 90 days trading horizon Bell AG is expected to generate 0.73 times more return on investment than Emmi AG. However, Bell AG is 1.38 times less risky than Emmi AG. It trades about 0.04 of its potential returns per unit of risk. Emmi AG is currently generating about -0.25 per unit of risk. If you would invest 26,350 in Bell AG on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Bell AG or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bell AG vs. Emmi AG
Performance |
| Timeline |
| Bell AG |
| Emmi AG |
Bell AG and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell AG and Emmi AG
The main advantage of trading using opposite Bell AG and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell AG position performs unexpectedly, Emmi 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 Emmi AG will offset losses from the drop in Emmi AG's long position.| Bell AG vs. Emmi AG | Bell AG vs. Feintool International Holding | Bell AG vs. Implenia AG | Bell AG vs. Bossard Holding AG |
| Emmi AG vs. Bucher Industries AG | Emmi AG vs. EMS CHEMIE HOLDING AG | Emmi AG vs. Barry Callebaut AG | Emmi AG vs. Geberit AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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