Correlation Between Granite 3x and Straumann Holding

Can any of the company-specific risk be diversified away by investing in both Granite 3x and Straumann Holding 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 Granite 3x and Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite 3x LVMH and Straumann Holding AG, you can compare the effects of market volatilities on Granite 3x and Straumann Holding 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 Granite 3x with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Straumann Holding.

Diversification Opportunities for Granite 3x and Straumann Holding

0.34

Correlation Coefficient

Granite 3x  Straumann Holding

Weak diversification

The 3 months correlation between Granite and Straumann is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Granite 3x i.e., Granite 3x and Straumann Holding go up and down completely randomly.

Pair Corralation between Granite 3x and Straumann Holding

Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Straumann Holding. In addition to that, Granite 3x is 3.79 times more volatile than Straumann Holding AG. It trades about -0.06 of its total potential returns per unit of risk. Straumann Holding AG is currently generating about -0.04 per unit of volatility. If you would invest  12,225  in Straumann Holding AG on September 3, 2024 and sell it today you would lose (760.00) from holding Straumann Holding AG or give up 6.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.62%
Values	Daily Returns

Granite 3x LVMH  vs.  Straumann Holding AG

Granite 3x LVMH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Granite 3x LVMH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Straumann Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Straumann Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Straumann Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Granite 3x and Straumann Holding

The main advantage of trading using opposite Granite 3x and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.

The idea behind Granite 3x LVMH and Straumann Holding AG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.