Correlation Between Chocoladefabriken and Delfi

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

By analyzing existing cross correlation between Chocoladefabriken Lindt Sprngli and Delfi Limited, you can compare the effects of market volatilities on Chocoladefabriken and Delfi 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 Chocoladefabriken with a short position of Delfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Delfi.

Diversification Opportunities for Chocoladefabriken and Delfi

0.78

Correlation Coefficient

Chocoladefabriken  Delfi

Poor diversification

The 3 months correlation between Chocoladefabriken and Delfi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Sprngl and Delfi Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delfi Limited and Chocoladefabriken 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 Chocoladefabriken Lindt Sprngli are associated (or correlated) with Delfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delfi Limited has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Delfi go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Delfi

If you would invest  69.00  in Delfi Limited on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Delfi Limited or generate 0.0% return on investment over 90 days.

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

Chocoladefabriken Lindt Sprngl  vs.  Delfi Limited

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Sprngli has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Delfi Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delfi Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Chocoladefabriken and Delfi

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

The idea behind Chocoladefabriken Lindt Sprngli and Delfi Limited 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.