Correlation Between Carlo Gavazzi and Implenia

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

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

Diversification Opportunities for Carlo Gavazzi and Implenia

0.7

Correlation Coefficient

Carlo Gavazzi  Implenia

Poor diversification

The 3 months correlation between Carlo and Implenia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carlo Gavazzi Holding and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Carlo Gavazzi 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 Carlo Gavazzi Holding are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Carlo Gavazzi i.e., Carlo Gavazzi and Implenia go up and down completely randomly.

Pair Corralation between Carlo Gavazzi and Implenia

Assuming the 90 days trading horizon Carlo Gavazzi Holding is expected to under-perform the Implenia. In addition to that, Carlo Gavazzi is 1.32 times more volatile than Implenia AG. It trades about -0.04 of its total potential returns per unit of risk. Implenia AG is currently generating about 0.06 per unit of volatility. If you would invest  2,995  in Implenia AG on September 15, 2024 and sell it today you would earn a total of  55.00  from holding Implenia AG or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Carlo Gavazzi Holding  vs.  Implenia AG

Carlo Gavazzi Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlo Gavazzi Holding 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 stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Implenia AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Implenia 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 Carlo Gavazzi and Implenia

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

The idea behind Carlo Gavazzi Holding and Implenia 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.