Correlation Between Tootsie Roll and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Tootsie Roll 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 Tootsie Roll and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tootsie Roll Industries and Barry Callebaut AG, you can compare the effects of market volatilities on Tootsie Roll 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 Tootsie Roll with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and Barry Callebaut.
Diversification Opportunities for Tootsie Roll and Barry Callebaut
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tootsie and Barry is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries 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 Tootsie Roll 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 Tootsie Roll Industries 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 Tootsie Roll i.e., Tootsie Roll and Barry Callebaut go up and down completely randomly.
Pair Corralation between Tootsie Roll and Barry Callebaut
Assuming the 90 days horizon Tootsie Roll Industries is expected to under-perform the Barry Callebaut. In addition to that, Tootsie Roll is 1.02 times more volatile than Barry Callebaut AG. It trades about -0.05 of its total potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.01 per unit of volatility. If you would invest 194,000 in Barry Callebaut AG on September 13, 2024 and sell it today you would lose (49,000) from holding Barry Callebaut AG or give up 25.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 63.18% |
| Values | Daily Returns |
Tootsie Roll Industries vs. Barry Callebaut AG
Performance |
| Timeline |
| Tootsie Roll Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Barry Callebaut AG |
Tootsie Roll and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tootsie Roll and Barry Callebaut
The main advantage of trading using opposite Tootsie Roll and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tootsie Roll 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.| Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Tootsie Roll Industries | Tootsie Roll vs. Rocky Mountain Chocolate |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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