Correlation Between Symrise Ag and Sika AG

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

Diversification Opportunities for Symrise Ag and Sika AG

-0.23

Correlation Coefficient

Symrise Ag  Sika AG

Very good diversification

The 3 months correlation between Symrise and Sika is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Sika AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sika AG 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 Sika AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sika AG has no effect on the direction of Symrise Ag i.e., Symrise Ag and Sika AG go up and down completely randomly.

Pair Corralation between Symrise Ag and Sika AG

Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Sika AG. But the pink sheet apears to be less risky and, when comparing its historical volatility, Symrise Ag PK is 1.2 times less risky than Sika AG. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Sika AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  23,860  in Sika AG on December 28, 2024 and sell it today you would earn a total of  1,091  from holding Sika AG or generate 4.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Symrise Ag PK  vs.  Sika AG

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.

Sika AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sika AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sika AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Symrise Ag and Sika AG

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

The idea behind Symrise Ag PK and Sika AG 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.