Correlation Between Givaudan and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Givaudan and Barry Callebaut 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 Givaudan and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Barry Callebaut AG, you can compare the effects of market volatilities on Givaudan and Barry Callebaut 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 Givaudan with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Barry Callebaut.
Diversification Opportunities for Givaudan and Barry Callebaut
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Givaudan and Barry is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG and Givaudan 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 Givaudan SA are associated (or correlated) with Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Givaudan i.e., Givaudan and Barry Callebaut go up and down completely randomly.
Pair Corralation between Givaudan and Barry Callebaut
Assuming the 90 days trading horizon Givaudan SA is expected to generate 0.58 times more return on investment than Barry Callebaut. However, Givaudan SA is 1.73 times less risky than Barry Callebaut. It trades about 0.04 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.04 per unit of risk. If you would invest 361,412 in Givaudan SA on November 3, 2024 and sell it today you would earn a total of 37,288 from holding Givaudan SA or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Givaudan SA vs. Barry Callebaut AG
Performance |
| Timeline |
| Givaudan SA |
| Barry Callebaut AG |
Givaudan and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Barry Callebaut
The main advantage of trading using opposite Givaudan and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan position performs unexpectedly, Barry Callebaut 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 Barry Callebaut will offset losses from the drop in Barry Callebaut's long position.The idea behind Givaudan SA and Barry Callebaut AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Barry Callebaut vs. Givaudan SA | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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