Correlation Between Emmi AG and Orior AG
Can any of the company-specific risk be diversified away by investing in both Emmi AG and Orior AG 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 Orior AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmi AG and Orior AG, you can compare the effects of market volatilities on Emmi AG and Orior AG 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 Orior AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmi AG and Orior AG.
Diversification Opportunities for Emmi AG and Orior AG
Almost no diversification
The 3 months correlation between Emmi and Orior is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Orior AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orior 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 Orior AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orior AG has no effect on the direction of Emmi AG i.e., Emmi AG and Orior AG go up and down completely randomly.
Pair Corralation between Emmi AG and Orior AG
Assuming the 90 days trading horizon Emmi AG is expected to generate 0.46 times more return on investment than Orior AG. However, Emmi AG is 2.17 times less risky than Orior AG. It trades about -0.32 of its potential returns per unit of risk. Orior AG is currently generating about -0.23 per unit of risk. If you would invest 85,000 in Emmi AG on August 28, 2024 and sell it today you would lose (6,600) from holding Emmi AG or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emmi AG vs. Orior AG
Performance |
| Timeline |
| Emmi AG |
| Orior AG |
Emmi AG and Orior AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmi AG and Orior AG
The main advantage of trading using opposite Emmi AG and Orior AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmi AG position performs unexpectedly, Orior AG 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 Orior AG will offset losses from the drop in Orior AG's long position.| Emmi AG vs. Santhera Pharmaceuticals Holding | Emmi AG vs. Newron Pharmaceuticals SpA | Emmi AG vs. Basilea Pharmaceutica AG | Emmi AG vs. Evolva Holding SA |
| Orior AG vs. Emmi AG | Orior AG vs. Feintool International Holding | Orior AG vs. Implenia AG | Orior AG vs. Bossard Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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