Correlation Between Cembra Money and EMS CHEMIE
Can any of the company-specific risk be diversified away by investing in both Cembra Money and EMS CHEMIE 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 Cembra Money and EMS CHEMIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Cembra Money and EMS CHEMIE 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 Cembra Money with a short position of EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and EMS CHEMIE.
Diversification Opportunities for Cembra Money and EMS CHEMIE
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cembra and EMS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and EMS CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS CHEMIE HOLDING and Cembra Money 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 Cembra Money Bank are associated (or correlated) with EMS CHEMIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS CHEMIE HOLDING has no effect on the direction of Cembra Money i.e., Cembra Money and EMS CHEMIE go up and down completely randomly.
Pair Corralation between Cembra Money and EMS CHEMIE
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.96 times more return on investment than EMS CHEMIE. However, Cembra Money Bank is 1.04 times less risky than EMS CHEMIE. It trades about 0.13 of its potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about 0.01 per unit of risk. If you would invest 6,413 in Cembra Money Bank on November 3, 2024 and sell it today you would earn a total of 2,577 from holding Cembra Money Bank or generate 40.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. EMS CHEMIE HOLDING AG
Performance |
| Timeline |
| Cembra Money Bank |
| EMS CHEMIE HOLDING |
Cembra Money and EMS CHEMIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and EMS CHEMIE
The main advantage of trading using opposite Cembra Money and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, EMS CHEMIE 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 EMS CHEMIE will offset losses from the drop in EMS CHEMIE's long position.| Cembra Money vs. Helvetia Holding AG | Cembra Money vs. Swiss Life Holding | Cembra Money vs. Baloise Holding AG | Cembra Money vs. Logitech International SA |
| EMS CHEMIE vs. Luzerner Kantonalbank AG | EMS CHEMIE vs. Hypothekarbank Lenzburg AG | EMS CHEMIE vs. Glarner Kantonalbank | EMS CHEMIE vs. BB Biotech 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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