Correlation Between Chocoladefabriken and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Straumann Holding 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 Straumann Holding 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 Straumann Holding AG, you can compare the effects of market volatilities on Chocoladefabriken and Straumann Holding 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 Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Straumann Holding.
Diversification Opportunities for Chocoladefabriken and Straumann Holding
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chocoladefabriken and Straumann is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding 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 Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Straumann Holding go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Straumann Holding
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.52 times more return on investment than Straumann Holding. However, Chocoladefabriken Lindt Spruengli is 1.91 times less risky than Straumann Holding. It trades about -0.01 of its potential returns per unit of risk. Straumann Holding AG is currently generating about -0.02 per unit of risk. If you would invest 10,733,800 in Chocoladefabriken Lindt Spruengli on August 28, 2024 and sell it today you would lose (793,800) from holding Chocoladefabriken Lindt Spruengli or give up 7.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. Straumann Holding AG
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Straumann Holding |
Chocoladefabriken and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Straumann Holding
The main advantage of trading using opposite Chocoladefabriken and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Chocoladefabriken vs. Barry Callebaut AG | Chocoladefabriken vs. Givaudan SA | Chocoladefabriken vs. Geberit AG | Chocoladefabriken vs. Straumann Holding AG |
| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan 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 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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