Correlation Between Rocky Mountain and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Rocky Mountain 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 Rocky Mountain and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Mountain Chocolate and Barry Callebaut AG, you can compare the effects of market volatilities on Rocky Mountain 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 Rocky Mountain with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Mountain and Barry Callebaut.
Diversification Opportunities for Rocky Mountain and Barry Callebaut
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rocky and Barry is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Mountain Chocolate 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 Rocky Mountain 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 Rocky Mountain Chocolate 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 Rocky Mountain i.e., Rocky Mountain and Barry Callebaut go up and down completely randomly.
Pair Corralation between Rocky Mountain and Barry Callebaut
Given the investment horizon of 90 days Rocky Mountain Chocolate is expected to generate 1.62 times more return on investment than Barry Callebaut. However, Rocky Mountain is 1.62 times more volatile than Barry Callebaut AG. It trades about -0.18 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.34 per unit of risk. If you would invest 322.00 in Rocky Mountain Chocolate on August 28, 2024 and sell it today you would lose (52.00) from holding Rocky Mountain Chocolate or give up 16.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocky Mountain Chocolate vs. Barry Callebaut AG
Performance |
| Timeline |
| Rocky Mountain Chocolate |
| Barry Callebaut AG |
Rocky Mountain and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Mountain and Barry Callebaut
The main advantage of trading using opposite Rocky Mountain and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Mountain 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.| Rocky Mountain vs. Mondelez International | Rocky Mountain vs. Tootsie Roll Industries | Rocky Mountain vs. Chocoladefabriken Lindt Sprngli | Rocky Mountain vs. Barry Callebaut AG |
| Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Tootsie Roll Industries | Barry Callebaut vs. Rocky Mountain Chocolate | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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