Correlation Between Warteck Invest and EMS CHEMIE

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

By analyzing existing cross correlation between Warteck Invest and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Warteck Invest 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 Warteck Invest with a short position of EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warteck Invest and EMS CHEMIE.

Diversification Opportunities for Warteck Invest and EMS CHEMIE

0.25

Correlation Coefficient

Warteck Invest  EMS CHEMIE

Modest diversification

The 3 months correlation between Warteck and EMS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Warteck Invest 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 Warteck Invest 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 Warteck Invest 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 Warteck Invest i.e., Warteck Invest and EMS CHEMIE go up and down completely randomly.

Pair Corralation between Warteck Invest and EMS CHEMIE

Assuming the 90 days trading horizon Warteck Invest is expected to generate 0.42 times more return on investment than EMS CHEMIE. However, Warteck Invest is 2.37 times less risky than EMS CHEMIE. It trades about 0.03 of its potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about -0.01 per unit of risk. If you would invest  191,500  in Warteck Invest on December 30, 2024 and sell it today you would earn a total of  2,000  from holding Warteck Invest or generate 1.04% return on investment over 90 days.

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

Warteck Invest  vs.  EMS CHEMIE HOLDING AG

Warteck Invest

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Warteck Invest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Warteck Invest is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

EMS CHEMIE HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMS CHEMIE HOLDING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, EMS CHEMIE is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Warteck Invest and EMS CHEMIE

The main advantage of trading using opposite Warteck Invest and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warteck Invest 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.

The idea behind Warteck Invest and EMS CHEMIE HOLDING 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.