Correlation Between Emmi AG and Schindler Holding
Can any of the company-specific risk be diversified away by investing in both Emmi AG and Schindler Holding 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 Schindler Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmi AG and Schindler Holding AG, you can compare the effects of market volatilities on Emmi AG and Schindler Holding 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 Schindler Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmi AG and Schindler Holding.
Diversification Opportunities for Emmi AG and Schindler Holding
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emmi and Schindler is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Schindler Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Holding 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 Schindler Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Holding has no effect on the direction of Emmi AG i.e., Emmi AG and Schindler Holding go up and down completely randomly.
Pair Corralation between Emmi AG and Schindler Holding
Assuming the 90 days trading horizon Emmi AG is expected to under-perform the Schindler Holding. In addition to that, Emmi AG is 1.17 times more volatile than Schindler Holding AG. It trades about -0.27 of its total potential returns per unit of risk. Schindler Holding AG is currently generating about 0.09 per unit of volatility. If you would invest 24,950 in Schindler Holding AG on September 6, 2024 and sell it today you would earn a total of 500.00 from holding Schindler Holding AG or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Emmi AG vs. Schindler Holding AG
Performance |
| Timeline |
| Emmi AG |
| Schindler Holding |
Emmi AG and Schindler Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmi AG and Schindler Holding
The main advantage of trading using opposite Emmi AG and Schindler Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmi AG position performs unexpectedly, Schindler Holding 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 Schindler Holding will offset losses from the drop in Schindler Holding's long position.| Emmi AG vs. Implenia AG | Emmi AG vs. OC Oerlikon Corp | Emmi AG vs. Sulzer AG | Emmi AG vs. Swissquote Group Holding |
| Schindler Holding vs. Geberit AG | Schindler Holding vs. Givaudan SA | Schindler Holding vs. SGS SA | Schindler Holding vs. Straumann 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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