Correlation Between Mesabi Trust and Barry Callebaut

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

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

Diversification Opportunities for Mesabi Trust and Barry Callebaut

-0.45

Correlation Coefficient

Mesabi Trust  Barry Callebaut

Very good diversification

The 3 months correlation between Mesabi and Barry is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust 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 Mesabi Trust 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 Mesabi Trust 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 Mesabi Trust i.e., Mesabi Trust and Barry Callebaut go up and down completely randomly.

Pair Corralation between Mesabi Trust and Barry Callebaut

Considering the 90-day investment horizon Mesabi Trust is expected to generate 0.81 times more return on investment than Barry Callebaut. However, Mesabi Trust is 1.24 times less risky than Barry Callebaut. It trades about 0.23 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.34 per unit of risk. If you would invest  2,860  in Mesabi Trust on October 27, 2024 and sell it today you would earn a total of  275.00  from holding Mesabi Trust or generate 9.62% return on investment over 90 days.

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

Mesabi Trust  vs.  Barry Callebaut AG

Mesabi Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mesabi Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Mesabi Trust sustained 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 Mesabi Trust and Barry Callebaut

The main advantage of trading using opposite Mesabi Trust and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesabi Trust 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 Mesabi Trust 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.