Correlation Between EMS CHEMIE and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Belimo 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 EMS CHEMIE and Belimo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMS CHEMIE HOLDING AG and Belimo Holding, you can compare the effects of market volatilities on EMS CHEMIE and Belimo 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 EMS CHEMIE with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Belimo Holding.
Diversification Opportunities for EMS CHEMIE and Belimo Holding
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMS and Belimo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and EMS CHEMIE 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 EMS CHEMIE HOLDING AG are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Belimo Holding go up and down completely randomly.
Pair Corralation between EMS CHEMIE and Belimo Holding
Assuming the 90 days trading horizon EMS CHEMIE HOLDING AG is expected to under-perform the Belimo Holding. But the stock apears to be less risky and, when comparing its historical volatility, EMS CHEMIE HOLDING AG is 1.53 times less risky than Belimo Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Belimo Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 43,254 in Belimo Holding on November 27, 2024 and sell it today you would earn a total of 18,096 from holding Belimo Holding or generate 41.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMS CHEMIE HOLDING AG vs. Belimo Holding
Performance |
| Timeline |
| EMS CHEMIE HOLDING |
| Belimo Holding |
EMS CHEMIE and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMS CHEMIE and Belimo Holding
The main advantage of trading using opposite EMS CHEMIE and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE position performs unexpectedly, Belimo 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 Belimo Holding will offset losses from the drop in Belimo Holding's long position.| EMS CHEMIE vs. St Galler Kantonalbank | EMS CHEMIE vs. Adval Tech Holding | EMS CHEMIE vs. Glarner Kantonalbank | EMS CHEMIE vs. HBM Healthcare Investments |
| Belimo Holding vs. EMS CHEMIE HOLDING AG | Belimo Holding vs. Geberit AG | Belimo Holding vs. VAT Group AG | Belimo Holding vs. Interroll 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |