Correlation Between Schindler and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Schindler and Emmi 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 Schindler and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schindler Ps and Emmi AG, you can compare the effects of market volatilities on Schindler and Emmi 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 Schindler with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schindler and Emmi AG.
Diversification Opportunities for Schindler and Emmi AG
Excellent diversification
The 3 months correlation between Schindler and Emmi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Schindler Ps and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Schindler 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 Schindler Ps are associated (or correlated) with Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Schindler i.e., Schindler and Emmi AG go up and down completely randomly.
Pair Corralation between Schindler and Emmi AG
Assuming the 90 days trading horizon Schindler Ps is expected to generate 0.87 times more return on investment than Emmi AG. However, Schindler Ps is 1.15 times less risky than Emmi AG. It trades about 0.11 of its potential returns per unit of risk. Emmi AG is currently generating about -0.05 per unit of risk. If you would invest 20,180 in Schindler Ps on September 4, 2024 and sell it today you would earn a total of 5,740 from holding Schindler Ps or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schindler Ps vs. Emmi AG
Performance |
| Timeline |
| Schindler Ps |
| Emmi AG |
Schindler and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schindler and Emmi AG
The main advantage of trading using opposite Schindler and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schindler position performs unexpectedly, Emmi 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 Emmi AG will offset losses from the drop in Emmi AG's long position.| Schindler vs. Emmi AG | Schindler vs. EMS CHEMIE HOLDING AG | Schindler vs. Barry Callebaut AG | Schindler vs. VAT Group AG |
| Emmi AG vs. Bucher Industries AG | Emmi AG vs. EMS CHEMIE HOLDING AG | Emmi AG vs. Barry Callebaut AG | Emmi AG vs. Geberit AG |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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