Correlation Between Symrise Ag and Loop Industries
Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Loop 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 Loop 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 Loop Industries, you can compare the effects of market volatilities on Symrise Ag and Loop 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 Loop Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Loop Industries.
Diversification Opportunities for Symrise Ag and Loop Industries
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Symrise and Loop is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Loop Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop 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 Loop Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Industries has no effect on the direction of Symrise Ag i.e., Symrise Ag and Loop Industries go up and down completely randomly.
Pair Corralation between Symrise Ag and Loop Industries
Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Loop Industries. But the pink sheet apears to be less risky and, when comparing its historical volatility, Symrise Ag PK is 2.7 times less risky than Loop Industries. The pink sheet trades about -0.43 of its potential returns per unit of risk. The Loop Industries is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Loop Industries on August 28, 2024 and sell it today you would lose (4.00) from holding Loop Industries or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symrise Ag PK vs. Loop Industries
Performance |
| Timeline |
| Symrise Ag PK |
| Loop Industries |
Symrise Ag and Loop Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symrise Ag and Loop Industries
The main advantage of trading using opposite Symrise Ag and Loop Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symrise Ag position performs unexpectedly, Loop 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 Loop Industries will offset losses from the drop in Loop 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 |
| Loop Industries vs. H B Fuller | Loop Industries vs. Element Solutions | Loop Industries vs. Innospec | Loop Industries vs. Cabot |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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