Correlation Between Chocoladefabriken and Geberit AG
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Geberit 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 Chocoladefabriken and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and Geberit AG, you can compare the effects of market volatilities on Chocoladefabriken and Geberit 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 Chocoladefabriken with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Geberit AG.
Diversification Opportunities for Chocoladefabriken and Geberit AG
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chocoladefabriken and Geberit is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Geberit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit 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 Spruengli are associated (or correlated) with Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Geberit AG go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Geberit AG
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.87 times more return on investment than Geberit AG. However, Chocoladefabriken Lindt Spruengli is 1.15 times less risky than Geberit AG. It trades about -0.01 of its potential returns per unit of risk. Geberit AG is currently generating about -0.02 per unit of risk. If you would invest 10,700,000 in Chocoladefabriken Lindt Spruengli on November 3, 2024 and sell it today you would lose (360,000) from holding Chocoladefabriken Lindt Spruengli or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. Geberit AG
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Geberit AG |
Chocoladefabriken and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Geberit AG
The main advantage of trading using opposite Chocoladefabriken and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, Geberit 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 Geberit AG will offset losses from the drop in Geberit AG's long position.| Chocoladefabriken vs. Adval Tech Holding | Chocoladefabriken vs. HBM Healthcare Investments | Chocoladefabriken vs. Logitech International SA | Chocoladefabriken vs. Zurich Insurance Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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