Correlation Between Aryzta AG and Minerva SA

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

By analyzing existing cross correlation between Aryzta AG PK and Minerva SA, you can compare the effects of market volatilities on Aryzta AG and Minerva SA 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 Aryzta AG with a short position of Minerva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aryzta AG and Minerva SA.

Diversification Opportunities for Aryzta AG and Minerva SA

0.68

Correlation Coefficient

Aryzta AG  Minerva SA

Poor diversification

The 3 months correlation between Aryzta and Minerva is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA and Aryzta AG 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 Aryzta AG PK are associated (or correlated) with Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Aryzta AG i.e., Aryzta AG and Minerva SA go up and down completely randomly.

Pair Corralation between Aryzta AG and Minerva SA

Assuming the 90 days horizon Aryzta AG PK is expected to generate 0.67 times more return on investment than Minerva SA. However, Aryzta AG PK is 1.48 times less risky than Minerva SA. It trades about -0.11 of its potential returns per unit of risk. Minerva SA is currently generating about -0.16 per unit of risk. If you would invest  97.00  in Aryzta AG PK on September 3, 2024 and sell it today you would lose (14.00) from holding Aryzta AG PK or give up 14.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aryzta AG PK  vs.  Minerva SA

Aryzta AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly 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 company investors.

Minerva SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerva SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly 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 company investors.

Pair Trading with Aryzta AG and Minerva SA

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

The idea behind Aryzta AG PK and Minerva SA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.