Correlation Between Barry Callebaut and Mondelez International
Can any of the company-specific risk be diversified away by investing in both Barry Callebaut and Mondelez International 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 Mondelez International 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 Mondelez International, you can compare the effects of market volatilities on Barry Callebaut and Mondelez International 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 Mondelez International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Mondelez International.
Diversification Opportunities for Barry Callebaut and Mondelez International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barry and Mondelez is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Mondelez International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondelez International 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 Mondelez International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondelez International has no effect on the direction of Barry Callebaut i.e., Barry Callebaut and Mondelez International go up and down completely randomly.
Pair Corralation between Barry Callebaut and Mondelez International
Assuming the 90 days horizon Barry Callebaut AG is expected to under-perform the Mondelez International. In addition to that, Barry Callebaut is 3.94 times more volatile than Mondelez International. It trades about -0.27 of its total potential returns per unit of risk. Mondelez International is currently generating about -0.25 per unit of volatility. If you would invest 6,556 in Mondelez International on September 15, 2024 and sell it today you would lose (363.00) from holding Mondelez International or give up 5.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barry Callebaut AG vs. Mondelez International
Performance |
| Timeline |
| Barry Callebaut AG |
| Mondelez International |
Barry Callebaut and Mondelez International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barry Callebaut and Mondelez International
The main advantage of trading using opposite Barry Callebaut and Mondelez International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut position performs unexpectedly, Mondelez International 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 Mondelez International will offset losses from the drop in Mondelez International's long position.| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli | Barry Callebaut vs. Bunzl plc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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