Correlation Between Chocoladefabriken and St Galler

Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and St Galler 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 Chocoladefabriken and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and St Galler Kantonalbank, you can compare the effects of market volatilities on Chocoladefabriken and St Galler 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 Chocoladefabriken with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and St Galler.

Diversification Opportunities for Chocoladefabriken and St Galler

-0.42

Correlation Coefficient

Chocoladefabriken  St Galler

Very good diversification

The 3 months correlation between Chocoladefabriken and 0QQZ is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and St Galler go up and down completely randomly.

Pair Corralation between Chocoladefabriken and St Galler

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to under-perform the St Galler. In addition to that, Chocoladefabriken is 1.06 times more volatile than St Galler Kantonalbank. It trades about -0.12 of its total potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.16 per unit of volatility. If you would invest  41,650  in St Galler Kantonalbank on October 8, 2024 and sell it today you would earn a total of  3,250  from holding St Galler Kantonalbank or generate 7.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  St Galler Kantonalbank

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Chocoladefabriken is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

St Galler Kantonalbank

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chocoladefabriken and St Galler

The main advantage of trading using opposite Chocoladefabriken and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.

The idea behind Chocoladefabriken Lindt Spruengli and St Galler Kantonalbank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.