Correlation Between SL Private and Chocoladefabriken

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

By analyzing existing cross correlation between SL Private Equity and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on SL Private and Chocoladefabriken 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 SL Private with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Private and Chocoladefabriken.

Diversification Opportunities for SL Private and Chocoladefabriken

0.64

Correlation Coefficient

SL Private  Chocoladefabriken

Poor diversification

The 3 months correlation between SLPE and Chocoladefabriken is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SL Private Equity and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and SL Private 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 SL Private Equity are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of SL Private i.e., SL Private and Chocoladefabriken go up and down completely randomly.

Pair Corralation between SL Private and Chocoladefabriken

Assuming the 90 days trading horizon SL Private is expected to generate 4.56 times less return on investment than Chocoladefabriken. But when comparing it to its historical volatility, SL Private Equity is 1.72 times less risky than Chocoladefabriken. It trades about 0.09 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  10,360,000  in Chocoladefabriken Lindt Spruengli on December 2, 2024 and sell it today you would earn a total of  640,000  from holding Chocoladefabriken Lindt Spruengli or generate 6.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

SL Private Equity  vs.  Chocoladefabriken Lindt Spruen

SL Private Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SL Private Equity are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SL Private is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chocoladefabriken may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SL Private and Chocoladefabriken

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

The idea behind SL Private Equity and Chocoladefabriken Lindt Spruengli 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.