Correlation Between Chocoladefabriken and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken 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 Chocoladefabriken and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Sprngli and Barry Callebaut AG, you can compare the effects of market volatilities on Chocoladefabriken 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 Chocoladefabriken with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Barry Callebaut.
Diversification Opportunities for Chocoladefabriken and Barry Callebaut
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chocoladefabriken and Barry is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Sprngl 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 Chocoladefabriken 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 Chocoladefabriken Lindt Sprngli 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 Chocoladefabriken i.e., Chocoladefabriken and Barry Callebaut go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Barry Callebaut
Assuming the 90 days horizon Chocoladefabriken Lindt Sprngli is expected to generate 0.38 times more return on investment than Barry Callebaut. However, Chocoladefabriken Lindt Sprngli is 2.67 times less risky than Barry Callebaut. It trades about 0.13 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.31 per unit of risk. If you would invest 1,107,183 in Chocoladefabriken Lindt Sprngli on November 2, 2024 and sell it today you would earn a total of 28,734 from holding Chocoladefabriken Lindt Sprngli or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Sprngl vs. Barry Callebaut AG
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Barry Callebaut AG |
Chocoladefabriken and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Barry Callebaut
The main advantage of trading using opposite Chocoladefabriken and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken 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.| Chocoladefabriken vs. Mondelez International | Chocoladefabriken vs. Tootsie Roll Industries | Chocoladefabriken vs. Rocky Mountain Chocolate | Chocoladefabriken vs. Barry Callebaut AG |
| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Citigroup | Barry Callebaut vs. MP Materials Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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