Correlation Between Symrise Ag and Evonik Industries
Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Evonik Industries 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 Symrise Ag and Evonik Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symrise Ag PK and Evonik Industries AG, you can compare the effects of market volatilities on Symrise Ag and Evonik Industries 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 Symrise Ag with a short position of Evonik Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Evonik Industries.
Diversification Opportunities for Symrise Ag and Evonik Industries
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Symrise and Evonik is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Evonik Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evonik Industries and Symrise Ag 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 Symrise Ag PK are associated (or correlated) with Evonik Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evonik Industries has no effect on the direction of Symrise Ag i.e., Symrise Ag and Evonik Industries go up and down completely randomly.
Pair Corralation between Symrise Ag and Evonik Industries
Assuming the 90 days horizon Symrise Ag PK is expected to generate 0.53 times more return on investment than Evonik Industries. However, Symrise Ag PK is 1.88 times less risky than Evonik Industries. It trades about -0.3 of its potential returns per unit of risk. Evonik Industries AG is currently generating about -0.33 per unit of risk. If you would invest 2,984 in Symrise Ag PK on September 4, 2024 and sell it today you would lose (245.00) from holding Symrise Ag PK or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Symrise Ag PK vs. Evonik Industries AG
Performance |
| Timeline |
| Symrise Ag PK |
| Evonik Industries |
Symrise Ag and Evonik Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symrise Ag and Evonik Industries
The main advantage of trading using opposite Symrise Ag and Evonik Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symrise Ag position performs unexpectedly, Evonik Industries 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 Evonik Industries will offset losses from the drop in Evonik Industries' long position.| Symrise Ag vs. Givaudan SA ADR | Symrise Ag vs. Sysmex Corp | Symrise Ag vs. Shin Etsu Chemical Co | Symrise Ag vs. Brenntag AG ADR |
| Evonik Industries vs. Symrise Ag PK | Evonik Industries vs. Fuchs Petrolub SE | Evonik Industries vs. Innospec | Evonik Industries vs. Air Liquide 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 CEOs Directory module to screen CEOs from public companies around the world.
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