Correlation Between Helvetia Holding and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and Emmi 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 Helvetia Holding and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and Emmi AG, you can compare the effects of market volatilities on Helvetia Holding and Emmi 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 Helvetia Holding with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Emmi AG.
Diversification Opportunities for Helvetia Holding and Emmi AG
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Helvetia and Emmi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Helvetia 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 Helvetia Holding AG are associated (or correlated) with Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Emmi AG go up and down completely randomly.
Pair Corralation between Helvetia Holding and Emmi AG
Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.67 times more return on investment than Emmi AG. However, Helvetia Holding AG is 1.5 times less risky than Emmi AG. It trades about 0.21 of its potential returns per unit of risk. Emmi AG is currently generating about -0.25 per unit of risk. If you would invest 14,870 in Helvetia Holding AG on August 31, 2024 and sell it today you would earn a total of 520.00 from holding Helvetia Holding AG or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helvetia Holding AG vs. Emmi AG
Performance |
| Timeline |
| Helvetia Holding |
| Emmi AG |
Helvetia Holding and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helvetia Holding and Emmi AG
The main advantage of trading using opposite Helvetia Holding and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, Emmi 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 Emmi AG will offset losses from the drop in Emmi AG's long position.| Helvetia Holding vs. Swiss Life Holding | Helvetia Holding vs. Baloise Holding AG | Helvetia Holding vs. Swiss Re AG | Helvetia Holding vs. Zurich Insurance Group |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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