Correlation Between EMS CHEMIE and Clariant
Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Clariant 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 Clariant 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 Clariant AG, you can compare the effects of market volatilities on EMS CHEMIE and Clariant 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 Clariant. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Clariant.
Diversification Opportunities for EMS CHEMIE and Clariant
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EMS and Clariant is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Clariant AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clariant 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 Clariant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clariant AG has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Clariant go up and down completely randomly.
Pair Corralation between EMS CHEMIE and Clariant
Assuming the 90 days trading horizon EMS CHEMIE HOLDING AG is expected to generate 0.64 times more return on investment than Clariant. However, EMS CHEMIE HOLDING AG is 1.55 times less risky than Clariant. It trades about -0.23 of its potential returns per unit of risk. Clariant AG is currently generating about -0.3 per unit of risk. If you would invest 67,800 in EMS CHEMIE HOLDING AG on August 25, 2024 and sell it today you would lose (3,850) from holding EMS CHEMIE HOLDING AG or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
EMS CHEMIE HOLDING AG vs. Clariant AG
Performance |
| Timeline |
| EMS CHEMIE HOLDING |
| Clariant AG |
EMS CHEMIE and Clariant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMS CHEMIE and Clariant
The main advantage of trading using opposite EMS CHEMIE and Clariant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE position performs unexpectedly, Clariant 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 Clariant will offset losses from the drop in Clariant's long position.| EMS CHEMIE vs. St Galler Kantonalbank | EMS CHEMIE vs. VP Bank AG | EMS CHEMIE vs. Metall Zug AG | EMS CHEMIE vs. mobilezone 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |