Correlation Between Chocoladefabriken and So Martinho
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and So Martinho 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 Chocoladefabriken and So Martinho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Sprngli and So Martinho SA, you can compare the effects of market volatilities on Chocoladefabriken and So Martinho 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 Chocoladefabriken with a short position of So Martinho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and So Martinho.
Diversification Opportunities for Chocoladefabriken and So Martinho
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chocoladefabriken and SMTO3 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Sprngl and So Martinho SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Martinho SA and Chocoladefabriken 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 Chocoladefabriken Lindt Sprngli are associated (or correlated) with So Martinho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Martinho SA has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and So Martinho go up and down completely randomly.
Pair Corralation between Chocoladefabriken and So Martinho
Assuming the 90 days horizon Chocoladefabriken Lindt Sprngli is expected to under-perform the So Martinho. In addition to that, Chocoladefabriken is 2.19 times more volatile than So Martinho SA. It trades about -0.03 of its total potential returns per unit of risk. So Martinho SA is currently generating about 0.02 per unit of volatility. If you would invest 2,338 in So Martinho SA on September 2, 2024 and sell it today you would earn a total of 202.00 from holding So Martinho SA or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Sprngl vs. So Martinho SA
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| So Martinho SA |
Chocoladefabriken and So Martinho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and So Martinho
The main advantage of trading using opposite Chocoladefabriken and So Martinho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, So Martinho 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 So Martinho will offset losses from the drop in So Martinho's long position.| Chocoladefabriken vs. Chocoladefabriken Lindt Sprngli | Chocoladefabriken vs. Hershey Co | Chocoladefabriken vs. Chocoladefabriken Lindt Sprngli | Chocoladefabriken vs. So Martinho SA |
| So Martinho vs. Companhia Siderrgica Nacional | So Martinho vs. Cyrela Brazil Realty | So Martinho vs. Fras le SA | So Martinho vs. Energisa 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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