Correlation Between Implenia and Barry Callebaut

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

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

Diversification Opportunities for Implenia and Barry Callebaut

0.76

Correlation Coefficient

Implenia  Barry Callebaut

Poor diversification

The 3 months correlation between Implenia and Barry is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG 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 Implenia 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 Implenia AG 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 Implenia i.e., Implenia and Barry Callebaut go up and down completely randomly.

Pair Corralation between Implenia and Barry Callebaut

Assuming the 90 days trading horizon Implenia AG is expected to generate 0.91 times more return on investment than Barry Callebaut. However, Implenia AG is 1.1 times less risky than Barry Callebaut. It trades about 0.03 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.1 per unit of risk. If you would invest  3,020  in Implenia AG on September 12, 2024 and sell it today you would earn a total of  70.00  from holding Implenia AG or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Implenia AG  vs.  Barry Callebaut AG

Implenia AG

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 2 (%) 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.

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. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Implenia and Barry Callebaut

The main advantage of trading using opposite Implenia and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia 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 Implenia AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.