Correlation Between Symrise Ag and Fuchs Petrolub

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

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

Diversification Opportunities for Symrise Ag and Fuchs Petrolub

-0.19

Correlation Coefficient

Symrise Ag  Fuchs Petrolub

Good diversification

The 3 months correlation between Symrise and Fuchs is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Fuchs Petrolub SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuchs Petrolub SE and Symrise 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 Symrise Ag PK are associated (or correlated) with Fuchs Petrolub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuchs Petrolub SE has no effect on the direction of Symrise Ag i.e., Symrise Ag and Fuchs Petrolub go up and down completely randomly.

Pair Corralation between Symrise Ag and Fuchs Petrolub

Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Fuchs Petrolub. But the pink sheet apears to be less risky and, when comparing its historical volatility, Symrise Ag PK is 1.48 times less risky than Fuchs Petrolub. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Fuchs Petrolub SE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,080  in Fuchs Petrolub SE on December 29, 2024 and sell it today you would earn a total of  131.00  from holding Fuchs Petrolub SE or generate 12.13% return on investment over 90 days.

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

Symrise Ag PK  vs.  Fuchs Petrolub SE

Symrise Ag PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Symrise Ag PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Symrise Ag is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fuchs Petrolub SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuchs Petrolub SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Fuchs Petrolub showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symrise Ag and Fuchs Petrolub

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

The idea behind Symrise Ag PK and Fuchs Petrolub SE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.