Correlation Between Sharing Services and Aryzta AG

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

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

Diversification Opportunities for Sharing Services and Aryzta AG

0.39

Correlation Coefficient

Sharing Services  Aryzta AG

Weak diversification

The 3 months correlation between Sharing and Aryzta is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sharing Services Global and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK and Sharing Services 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 Sharing Services Global are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of Sharing Services i.e., Sharing Services and Aryzta AG go up and down completely randomly.

Pair Corralation between Sharing Services and Aryzta AG

Given the investment horizon of 90 days Sharing Services Global is expected to under-perform the Aryzta AG. In addition to that, Sharing Services is 8.86 times more volatile than Aryzta AG PK. It trades about -0.04 of its total potential returns per unit of risk. Aryzta AG PK is currently generating about -0.11 per unit of volatility. If you would invest  97.00  in Aryzta AG PK on August 31, 2024 and sell it today you would lose (14.00) from holding Aryzta AG PK or give up 14.43% of portfolio value over 90 days.

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

Sharing Services Global  vs.  Aryzta AG PK

Sharing Services Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharing Services Global 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 basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Aryzta AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sharing Services and Aryzta AG

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

The idea behind Sharing Services Global and Aryzta AG PK 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.