Correlation Between Chocoladefabriken and Bell Food

Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on Chocoladefabriken and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Bell Food.

Diversification Opportunities for Chocoladefabriken and Bell Food

-0.01

Correlation Coefficient

Chocoladefabriken  Bell Food

Good diversification

The 3 months correlation between Chocoladefabriken and Bell is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Bell Food go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Bell Food

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to under-perform the Bell Food. But the stock apears to be less risky and, when comparing its historical volatility, Chocoladefabriken Lindt Spruengli is 1.01 times less risky than Bell Food. The stock trades about -0.04 of its potential returns per unit of risk. The Bell Food Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  25,400  in Bell Food Group on October 20, 2024 and sell it today you would earn a total of  100.00  from holding Bell Food Group or generate 0.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.43%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  Bell Food Group

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bell Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Chocoladefabriken and Bell Food

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

The idea behind Chocoladefabriken Lindt Spruengli and Bell Food Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.