Correlation Between Chocoladefabriken and Mobile Tornado

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

Diversification Opportunities for Chocoladefabriken and Mobile Tornado

-0.22

Correlation Coefficient

Chocoladefabriken  Mobile Tornado

Very good diversification

The 3 months correlation between Chocoladefabriken and Mobile is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Mobile Tornado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Tornado 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 Mobile Tornado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Tornado Group has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Mobile Tornado go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Mobile Tornado

Assuming the 90 days trading horizon Chocoladefabriken is expected to generate 19.15 times less return on investment than Mobile Tornado. But when comparing it to its historical volatility, Chocoladefabriken Lindt Spruengli is 10.22 times less risky than Mobile Tornado. It trades about 0.01 of its potential returns per unit of risk. Mobile Tornado Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  185.00  in Mobile Tornado Group on October 10, 2024 and sell it today you would lose (45.00) from holding Mobile Tornado Group or give up 24.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.79%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  Mobile Tornado 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.

Mobile Tornado Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile Tornado Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Chocoladefabriken and Mobile Tornado

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

The idea behind Chocoladefabriken Lindt Spruengli and Mobile Tornado 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.