Correlation Between Implenia and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Implenia 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 Implenia and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Implenia AG and Emmi AG, you can compare the effects of market volatilities on Implenia 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 Implenia with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Emmi AG.
Diversification Opportunities for Implenia and Emmi AG
Poor diversification
The 3 months correlation between Implenia and Emmi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Implenia 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 Implenia 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 Implenia i.e., Implenia and Emmi AG go up and down completely randomly.
Pair Corralation between Implenia and Emmi AG
Assuming the 90 days trading horizon Implenia AG is expected to generate 1.1 times more return on investment than Emmi AG. However, Implenia is 1.1 times more volatile than Emmi AG. It trades about -0.17 of its potential returns per unit of risk. Emmi AG is currently generating about -0.32 per unit of risk. If you would invest 3,145 in Implenia AG on August 28, 2024 and sell it today you would lose (145.00) from holding Implenia AG or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Implenia AG vs. Emmi AG
Performance |
| Timeline |
| Implenia AG |
| Emmi AG |
Implenia and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Implenia and Emmi AG
The main advantage of trading using opposite Implenia and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia 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.| Implenia vs. mobilezone ag | Implenia vs. Cembra Money Bank | Implenia vs. OC Oerlikon Corp | Implenia vs. Banque Cantonale |
| Emmi AG vs. Santhera Pharmaceuticals Holding | Emmi AG vs. Newron Pharmaceuticals SpA | Emmi AG vs. Basilea Pharmaceutica AG | Emmi AG vs. Evolva Holding SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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