Correlation Between Hershey and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Hershey and Chocoladefabriken 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 Hershey and Chocoladefabriken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hershey Co and Chocoladefabriken Lindt Sprngli, you can compare the effects of market volatilities on Hershey and Chocoladefabriken 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 Hershey with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hershey and Chocoladefabriken.
Diversification Opportunities for Hershey and Chocoladefabriken
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hershey and Chocoladefabriken is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hershey Co and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Hershey 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 Hershey Co are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Hershey i.e., Hershey and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Hershey and Chocoladefabriken
Considering the 90-day investment horizon Hershey Co is expected to generate 0.94 times more return on investment than Chocoladefabriken. However, Hershey Co is 1.06 times less risky than Chocoladefabriken. It trades about -0.01 of its potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about -0.03 per unit of risk. If you would invest 18,388 in Hershey Co on August 27, 2024 and sell it today you would lose (907.00) from holding Hershey Co or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hershey Co vs. Chocoladefabriken Lindt Sprngl
Performance |
| Timeline |
| Hershey |
| Chocoladefabriken Lindt |
Hershey and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hershey and Chocoladefabriken
The main advantage of trading using opposite Hershey and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hershey position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.| Hershey vs. Tootsie Roll Industries | Hershey vs. Rocky Mountain Chocolate | Hershey vs. Chocoladefabriken Lindt Sprngli | Hershey vs. Mondelez International |
| Chocoladefabriken vs. Mondelez International | Chocoladefabriken vs. Tootsie Roll Industries | Chocoladefabriken vs. Rocky Mountain Chocolate | Chocoladefabriken vs. Astera Labs, Common |
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 CEOs Directory module to screen CEOs from public companies around the world.
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