Correlation Between Gurit Holding and EMS CHEMIE
Can any of the company-specific risk be diversified away by investing in both Gurit Holding and EMS CHEMIE 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 Gurit Holding and EMS CHEMIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gurit Holding AG and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Gurit Holding and EMS CHEMIE 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 Gurit Holding with a short position of EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gurit Holding and EMS CHEMIE.
Diversification Opportunities for Gurit Holding and EMS CHEMIE
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gurit and EMS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gurit Holding AG and EMS CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS CHEMIE HOLDING and Gurit Holding 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 Gurit Holding AG are associated (or correlated) with EMS CHEMIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS CHEMIE HOLDING has no effect on the direction of Gurit Holding i.e., Gurit Holding and EMS CHEMIE go up and down completely randomly.
Pair Corralation between Gurit Holding and EMS CHEMIE
Assuming the 90 days trading horizon Gurit Holding AG is expected to under-perform the EMS CHEMIE. In addition to that, Gurit Holding is 7.26 times more volatile than EMS CHEMIE HOLDING AG. It trades about -0.23 of its total potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about -0.35 per unit of volatility. If you would invest 67,450 in EMS CHEMIE HOLDING AG on September 4, 2024 and sell it today you would lose (4,700) from holding EMS CHEMIE HOLDING AG or give up 6.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gurit Holding AG vs. EMS CHEMIE HOLDING AG
Performance |
| Timeline |
| Gurit Holding AG |
| EMS CHEMIE HOLDING |
Gurit Holding and EMS CHEMIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gurit Holding and EMS CHEMIE
The main advantage of trading using opposite Gurit Holding and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gurit Holding position performs unexpectedly, EMS CHEMIE 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 EMS CHEMIE will offset losses from the drop in EMS CHEMIE's long position.| Gurit Holding vs. Schweiter Technologies AG | Gurit Holding vs. Clariant AG | Gurit Holding vs. Interroll Holding AG | Gurit Holding vs. VAT Group AG |
| EMS CHEMIE vs. Adecco Group AG | EMS CHEMIE vs. ABB | EMS CHEMIE vs. Swiss Life Holding | EMS CHEMIE vs. Geberit 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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