Correlation Between EMS CHEMIE and Bell AG
Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Bell 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 EMS CHEMIE and Bell AG 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 Bell AG, you can compare the effects of market volatilities on EMS CHEMIE and Bell 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 EMS CHEMIE with a short position of Bell AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Bell AG.
Diversification Opportunities for EMS CHEMIE and Bell AG
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between EMS and Bell is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Bell AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell AG 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 Bell AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell AG has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Bell AG go up and down completely randomly.
Pair Corralation between EMS CHEMIE and Bell AG
Assuming the 90 days trading horizon EMS CHEMIE HOLDING AG is expected to under-perform the Bell AG. In addition to that, EMS CHEMIE is 1.01 times more volatile than Bell AG. It trades about -0.01 of its total potential returns per unit of risk. Bell AG is currently generating about 0.02 per unit of volatility. If you would invest 26,013 in Bell AG on September 4, 2024 and sell it today you would earn a total of 737.00 from holding Bell AG or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMS CHEMIE HOLDING AG vs. Bell AG
Performance |
| Timeline |
| EMS CHEMIE HOLDING |
| Bell AG |
EMS CHEMIE and Bell AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMS CHEMIE and Bell AG
The main advantage of trading using opposite EMS CHEMIE and Bell AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE position performs unexpectedly, Bell 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 Bell AG will offset losses from the drop in Bell AG's long position.| EMS CHEMIE vs. Adecco Group AG | EMS CHEMIE vs. ABB | EMS CHEMIE vs. Swiss Life Holding | EMS CHEMIE vs. Geberit AG |
| Bell AG vs. Emmi AG | Bell AG vs. Orior AG | Bell AG vs. Bucher Industries AG | Bell AG vs. EMS CHEMIE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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