Correlation Between Barry Callebaut and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both Barry Callebaut and Rocky Mountain 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 Rocky Mountain 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 Rocky Mountain Chocolate, you can compare the effects of market volatilities on Barry Callebaut and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Rocky Mountain.
Diversification Opportunities for Barry Callebaut and Rocky Mountain
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barry and Rocky is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Rocky Mountain Chocolate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Chocolate 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Chocolate has no effect on the direction of Barry Callebaut i.e., Barry Callebaut and Rocky Mountain go up and down completely randomly.
Pair Corralation between Barry Callebaut and Rocky Mountain
Assuming the 90 days horizon Barry Callebaut AG is expected to under-perform the Rocky Mountain. But the pink sheet apears to be less risky and, when comparing its historical volatility, Barry Callebaut AG is 1.88 times less risky than Rocky Mountain. The pink sheet trades about -0.23 of its potential returns per unit of risk. The Rocky Mountain Chocolate is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 275.00 in Rocky Mountain Chocolate on August 24, 2024 and sell it today you would lose (9.00) from holding Rocky Mountain Chocolate or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barry Callebaut AG vs. Rocky Mountain Chocolate
Performance |
| Timeline |
| Barry Callebaut AG |
| Rocky Mountain Chocolate |
Barry Callebaut and Rocky Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barry Callebaut and Rocky Mountain
The main advantage of trading using opposite Barry Callebaut and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.| Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Tootsie Roll Industries | Barry Callebaut vs. Rocky Mountain Chocolate | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli |
| Rocky Mountain vs. Tootsie Roll Industries | Rocky Mountain vs. Chocoladefabriken Lindt Sprngli | Rocky Mountain vs. Barry Callebaut AG | Rocky Mountain vs. Hershey Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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