Correlation Between Olin and Symrise AG

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

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

Diversification Opportunities for Olin and Symrise AG

0.38

Correlation Coefficient

Olin  Symrise AG

Weak diversification

The 3 months correlation between Olin and Symrise is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Olin Corp. and Symrise AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symrise AG and Olin 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 Olin Corporation are associated (or correlated) with Symrise AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symrise AG has no effect on the direction of Olin i.e., Olin and Symrise AG go up and down completely randomly.

Pair Corralation between Olin and Symrise AG

Considering the 90-day investment horizon Olin Corporation is expected to generate 0.62 times more return on investment than Symrise AG. However, Olin Corporation is 1.61 times less risky than Symrise AG. It trades about 0.04 of its potential returns per unit of risk. Symrise AG is currently generating about -0.24 per unit of risk. If you would invest  4,179  in Olin Corporation on September 5, 2024 and sell it today you would earn a total of  61.00  from holding Olin Corporation or generate 1.46% return on investment over 90 days.

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

Olin Corp.  vs.  Symrise AG

Olin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Olin Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Olin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Symrise AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symrise AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Olin and Symrise AG

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

The idea behind Olin Corporation and Symrise 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..