Correlation Between Aryzta AG and Planet Green

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

Diversification Opportunities for Aryzta AG and Planet Green

-0.44

Correlation Coefficient

Aryzta AG  Planet Green

Very good diversification

The 3 months correlation between Aryzta and Planet is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and Planet Green Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Green Holdings 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 Planet Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Green Holdings has no effect on the direction of Aryzta AG i.e., Aryzta AG and Planet Green go up and down completely randomly.

Pair Corralation between Aryzta AG and Planet Green

Assuming the 90 days horizon Aryzta AG PK is expected to generate 0.51 times more return on investment than Planet Green. However, Aryzta AG PK is 1.95 times less risky than Planet Green. It trades about 0.16 of its potential returns per unit of risk. Planet Green Holdings is currently generating about -0.06 per unit of risk. If you would invest  80.00  in Aryzta AG PK on November 20, 2024 and sell it today you would earn a total of  27.00  from holding Aryzta AG PK or generate 33.75% return on investment over 90 days.

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

Aryzta AG PK  vs.  Planet Green Holdings

Aryzta AG PK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aryzta AG PK are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Aryzta AG showed solid returns over the last few months and may actually be approaching a breakup point.

Planet Green Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Planet Green Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aryzta AG and Planet Green

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

The idea behind Aryzta AG PK and Planet Green Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.