Correlation Between Helium One and Givaudan

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

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

Diversification Opportunities for Helium One and Givaudan

0.46

Correlation Coefficient

Helium One  Givaudan

Very weak diversification

The 3 months correlation between Helium and Givaudan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Helium One Global and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA and Helium One 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 Helium One Global are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Helium One i.e., Helium One and Givaudan go up and down completely randomly.

Pair Corralation between Helium One and Givaudan

Assuming the 90 days trading horizon Helium One Global is expected to generate 9.3 times more return on investment than Givaudan. However, Helium One is 9.3 times more volatile than Givaudan SA. It trades about 0.02 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.05 per unit of risk. If you would invest  530.00  in Helium One Global on September 25, 2024 and sell it today you would lose (434.00) from holding Helium One Global or give up 81.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

Helium One Global  vs.  Givaudan SA

Helium One Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helium One Global 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Givaudan SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Givaudan SA 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Helium One and Givaudan

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

The idea behind Helium One Global and Givaudan 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.