Correlation Between Interroll Holding and EMS CHEMIE
Can any of the company-specific risk be diversified away by investing in both Interroll Holding 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 Interroll Holding and EMS CHEMIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interroll Holding AG and EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Interroll Holding 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 Interroll Holding with a short position of EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interroll Holding and EMS CHEMIE.
Diversification Opportunities for Interroll Holding and EMS CHEMIE
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Interroll and EMS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Interroll Holding 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 Interroll Holding 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 Interroll Holding 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 Interroll Holding i.e., Interroll Holding and EMS CHEMIE go up and down completely randomly.
Pair Corralation between Interroll Holding and EMS CHEMIE
Assuming the 90 days trading horizon Interroll Holding AG is expected to under-perform the EMS CHEMIE. In addition to that, Interroll Holding is 1.65 times more volatile than EMS CHEMIE HOLDING AG. It trades about -0.02 of its total potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about 0.2 per unit of volatility. If you would invest 65,000 in EMS CHEMIE HOLDING AG on March 14, 2024 and sell it today you would earn a total of 8,050 from holding EMS CHEMIE HOLDING AG or generate 12.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Interroll Holding AG vs. EMS CHEMIE HOLDING AG
Performance |
Timeline |
Interroll Holding |
EMS CHEMIE HOLDING |
Interroll Holding and EMS CHEMIE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Interroll Holding and EMS CHEMIE
The main advantage of trading using opposite Interroll Holding and EMS CHEMIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interroll Holding 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 Interroll Holding AG 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.EMS CHEMIE vs. Sika AG | EMS CHEMIE vs. Baloise Holding AG | EMS CHEMIE vs. Autoneum Holding AG | EMS CHEMIE vs. UBSFund Solutions Bloomberg |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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