Correlation Between Olin and Givaudan
Can any of the company-specific risk be diversified away by investing in both Olin and Givaudan 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 Olin and Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olin Corporation and Givaudan SA, you can compare the effects of market volatilities on Olin and Givaudan 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 Olin with a short position of Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olin and Givaudan.
Diversification Opportunities for Olin and Givaudan
Modest diversification
The 3 months correlation between Olin and Givaudan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Olin Corp. and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA and Olin 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 Olin Corporation are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Olin i.e., Olin and Givaudan go up and down completely randomly.
Pair Corralation between Olin and Givaudan
Considering the 90-day investment horizon Olin Corporation is expected to under-perform the Givaudan. But the stock apears to be less risky and, when comparing its historical volatility, Olin Corporation is 1.26 times less risky than Givaudan. The stock trades about -0.01 of its potential returns per unit of risk. The Givaudan SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 313,205 in Givaudan SA on September 1, 2024 and sell it today you would earn a total of 119,463 from holding Givaudan SA or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.28% |
| Values | Daily Returns |
Olin Corp. vs. Givaudan SA
Performance |
| Timeline |
| Olin |
| Givaudan SA |
Olin and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olin and Givaudan
The main advantage of trading using opposite Olin and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olin position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Olin vs. Select Energy Services | Olin vs. Westlake Chemical | Olin vs. Sensient Technologies | Olin vs. Axalta Coating Systems |
| Givaudan vs. Sherwin Williams Co | Givaudan vs. Air Liquide SA | Givaudan vs. LAir Liquide SA | Givaudan vs. Air Products and |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Directory Find actively traded commodities issued by global exchanges |