Correlation Between Sulzer AG and EMS CHEMIE
Can any of the company-specific risk be diversified away by investing in both Sulzer AG and EMS CHEMIE 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 Sulzer AG and EMS CHEMIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Sulzer AG and EMS CHEMIE 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 Sulzer AG with a short position of EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and EMS CHEMIE.
Diversification Opportunities for Sulzer AG and EMS CHEMIE
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sulzer and EMS is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG and EMS CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS CHEMIE HOLDING and Sulzer AG 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 Sulzer AG are associated (or correlated) with EMS CHEMIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS CHEMIE HOLDING has no effect on the direction of Sulzer AG i.e., Sulzer AG and EMS CHEMIE go up and down completely randomly.
Pair Corralation between Sulzer AG and EMS CHEMIE
Assuming the 90 days trading horizon Sulzer AG is expected to generate 1.78 times more return on investment than EMS CHEMIE. However, Sulzer AG is 1.78 times more volatile than EMS CHEMIE HOLDING AG. It trades about 0.05 of its potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about -0.14 per unit of risk. If you would invest 12,760 in Sulzer AG on September 15, 2024 and sell it today you would earn a total of 600.00 from holding Sulzer AG or generate 4.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sulzer AG vs. EMS CHEMIE HOLDING AG
Performance |
Timeline |
Sulzer AG |
EMS CHEMIE HOLDING |
Sulzer AG and EMS CHEMIE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sulzer AG and EMS CHEMIE
The main advantage of trading using opposite Sulzer AG and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG position performs unexpectedly, EMS CHEMIE 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 EMS CHEMIE will offset losses from the drop in EMS CHEMIE's long position.Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group AG |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |