Correlation Between Dave and Barry Callebaut

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

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

Diversification Opportunities for Dave and Barry Callebaut

-0.35

Correlation Coefficient

Dave  Barry Callebaut

Very good diversification

The 3 months correlation between Dave and Barry is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dave Inc and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG and Dave 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 Dave Inc are associated (or correlated) with Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Dave i.e., Dave and Barry Callebaut go up and down completely randomly.

Pair Corralation between Dave and Barry Callebaut

Given the investment horizon of 90 days Dave Inc is expected to generate 2.75 times more return on investment than Barry Callebaut. However, Dave is 2.75 times more volatile than Barry Callebaut AG. It trades about 0.21 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.26 per unit of risk. If you would invest  3,927  in Dave Inc on October 27, 2024 and sell it today you would earn a total of  5,062  from holding Dave Inc or generate 128.9% return on investment over 90 days.

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

Dave Inc  vs.  Barry Callebaut AG

Dave Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Dave exhibited solid returns over the last few months and may actually be approaching a breakup point.

Barry Callebaut AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barry Callebaut AG 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 fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Dave and Barry Callebaut

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

The idea behind Dave Inc and Barry Callebaut 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.