Correlation Between Hubersuhner and CPH Chemie

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

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

Diversification Opportunities for Hubersuhner and CPH Chemie

0.5

Correlation Coefficient

Hubersuhner  CPH Chemie

Very weak diversification

The 3 months correlation between Hubersuhner and CPH is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hubersuhner AG and CPH Chemie und in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPH Chemie und and Hubersuhner 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 Hubersuhner AG are associated (or correlated) with CPH Chemie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPH Chemie und has no effect on the direction of Hubersuhner i.e., Hubersuhner and CPH Chemie go up and down completely randomly.

Pair Corralation between Hubersuhner and CPH Chemie

Assuming the 90 days trading horizon Hubersuhner is expected to generate 1.18 times less return on investment than CPH Chemie. But when comparing it to its historical volatility, Hubersuhner AG is 1.98 times less risky than CPH Chemie. It trades about 0.07 of its potential returns per unit of risk. CPH Chemie und is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,800  in CPH Chemie und on December 2, 2024 and sell it today you would earn a total of  260.00  from holding CPH Chemie und or generate 3.82% return on investment over 90 days.

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

Hubersuhner AG  vs.  CPH Chemie und

Hubersuhner AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hubersuhner AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hubersuhner is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CPH Chemie und

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CPH Chemie und are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, CPH Chemie is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hubersuhner and CPH Chemie

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

The idea behind Hubersuhner AG and CPH Chemie und 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.