Correlation Between Rheinmetall and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Rheinmetall 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 Rheinmetall and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Barry Callebaut AG, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Barry Callebaut.
Diversification Opportunities for Rheinmetall and Barry Callebaut
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rheinmetall and Barry is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG 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 Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and Barry Callebaut go up and down completely randomly.
Pair Corralation between Rheinmetall and Barry Callebaut
Assuming the 90 days horizon Rheinmetall AG is expected to generate 1.02 times more return on investment than Barry Callebaut. However, Rheinmetall is 1.02 times more volatile than Barry Callebaut AG. It trades about 0.11 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.01 per unit of risk. If you would invest 19,565 in Rheinmetall AG on September 14, 2024 and sell it today you would earn a total of 45,715 from holding Rheinmetall AG or generate 233.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.36% |
| Values | Daily Returns |
Rheinmetall AG vs. Barry Callebaut AG
Performance |
| Timeline |
| Rheinmetall AG |
| Barry Callebaut AG |
Rheinmetall and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Barry Callebaut
The main advantage of trading using opposite Rheinmetall and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. Lockheed Martin | Rheinmetall vs. BAE Systems PLC | Rheinmetall vs. Qinetiq Group PLC | Rheinmetall vs. Leonardo SpA ADR |
| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli | Barry Callebaut vs. Bunzl plc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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