Correlation Between Symrise Ag and Givaudan

Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Givaudan 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 Givaudan 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 Givaudan SA ADR, you can compare the effects of market volatilities on Symrise Ag and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Givaudan.

Diversification Opportunities for Symrise Ag and Givaudan

0.3

Correlation Coefficient

Symrise Ag  Givaudan

Weak diversification

The 3 months correlation between Symrise and Givaudan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Givaudan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA ADR 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA ADR has no effect on the direction of Symrise Ag i.e., Symrise Ag and Givaudan go up and down completely randomly.

Pair Corralation between Symrise Ag and Givaudan

Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Givaudan. But the pink sheet apears to be less risky and, when comparing its historical volatility, Symrise Ag PK is 1.03 times less risky than Givaudan. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Givaudan SA ADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,593  in Givaudan SA ADR on December 30, 2024 and sell it today you would earn a total of  96.00  from holding Givaudan SA ADR or generate 1.12% return on investment over 90 days.

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

Symrise Ag PK  vs.  Givaudan SA ADR

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.

Givaudan SA ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Givaudan SA ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Givaudan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Symrise Ag and Givaudan

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

The idea behind Symrise Ag PK and Givaudan SA ADR 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.