Correlation Between Emmi AG and Implenia
Can any of the company-specific risk be diversified away by investing in both Emmi AG and Implenia 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 Emmi AG and Implenia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmi AG and Implenia AG, you can compare the effects of market volatilities on Emmi AG and Implenia 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 Emmi AG with a short position of Implenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmi AG and Implenia.
Diversification Opportunities for Emmi AG and Implenia
Poor diversification
The 3 months correlation between Emmi and Implenia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Emmi 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 Emmi AG are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Emmi AG i.e., Emmi AG and Implenia go up and down completely randomly.
Pair Corralation between Emmi AG and Implenia
Assuming the 90 days trading horizon Emmi AG is expected to under-perform the Implenia. But the stock apears to be less risky and, when comparing its historical volatility, Emmi AG is 1.34 times less risky than Implenia. The stock trades about -0.25 of its potential returns per unit of risk. The Implenia AG is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 3,055 in Implenia AG on August 31, 2024 and sell it today you would lose (155.00) from holding Implenia AG or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emmi AG vs. Implenia AG
Performance |
| Timeline |
| Emmi AG |
| Implenia AG |
Emmi AG and Implenia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmi AG and Implenia
The main advantage of trading using opposite Emmi AG and Implenia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmi AG position performs unexpectedly, Implenia 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 Implenia will offset losses from the drop in Implenia's long position.| Emmi AG vs. Bucher Industries AG | Emmi AG vs. EMS CHEMIE HOLDING AG | Emmi AG vs. Barry Callebaut AG | Emmi AG vs. Geberit AG |
| Implenia vs. Helvetia Holding AG | Implenia vs. Bucher Industries AG | Implenia vs. Hubersuhner AG | Implenia vs. Sulzer 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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