Correlation Between Symphony Environmental and Givaudan
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Givaudan 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 Symphony Environmental and Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and Givaudan SA, you can compare the effects of market volatilities on Symphony Environmental and Givaudan 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 Symphony Environmental with a short position of Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Givaudan.
Diversification Opportunities for Symphony Environmental and Givaudan
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Symphony and Givaudan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Givaudan go up and down completely randomly.
Pair Corralation between Symphony Environmental and Givaudan
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to under-perform the Givaudan. In addition to that, Symphony Environmental is 5.01 times more volatile than Givaudan SA. It trades about -0.02 of its total potential returns per unit of risk. Givaudan SA is currently generating about 0.1 per unit of volatility. If you would invest 274,484 in Givaudan SA on September 12, 2024 and sell it today you would earn a total of 122,116 from holding Givaudan SA or generate 44.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Symphony Environmental Technol vs. Givaudan SA
Performance |
| Timeline |
| Symphony Environmental |
| Givaudan SA |
Symphony Environmental and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and Givaudan
The main advantage of trading using opposite Symphony Environmental and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Symphony Environmental vs. Givaudan SA | Symphony Environmental vs. Antofagasta PLC | Symphony Environmental vs. Ferrexpo PLC | Symphony Environmental vs. Atalaya Mining |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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