Correlation Between Howmet Aerospace and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Howmet Aerospace 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 Howmet Aerospace and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Howmet Aerospace and Barry Callebaut AG, you can compare the effects of market volatilities on Howmet Aerospace 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 Howmet Aerospace with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howmet Aerospace and Barry Callebaut.
Diversification Opportunities for Howmet Aerospace and Barry Callebaut
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Howmet and Barry is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Howmet Aerospace 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 Howmet Aerospace 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 Howmet Aerospace 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 Howmet Aerospace i.e., Howmet Aerospace and Barry Callebaut go up and down completely randomly.
Pair Corralation between Howmet Aerospace and Barry Callebaut
Considering the 90-day investment horizon Howmet Aerospace is expected to generate 0.8 times more return on investment than Barry Callebaut. However, Howmet Aerospace is 1.25 times less risky than Barry Callebaut. It trades about 0.11 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.14 per unit of risk. If you would invest 10,258 in Howmet Aerospace on September 13, 2024 and sell it today you would earn a total of 1,189 from holding Howmet Aerospace or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Howmet Aerospace vs. Barry Callebaut AG
Performance |
| Timeline |
| Howmet Aerospace |
| Barry Callebaut AG |
Howmet Aerospace and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Howmet Aerospace and Barry Callebaut
The main advantage of trading using opposite Howmet Aerospace and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howmet Aerospace 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.| Howmet Aerospace vs. Curtiss Wright | Howmet Aerospace vs. Mercury Systems | Howmet Aerospace vs. AAR Corp | Howmet Aerospace vs. Ducommun Incorporated |
| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli | Barry Callebaut vs. Bunzl plc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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