Correlation Between Codan and Siltronic

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

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

Diversification Opportunities for Codan and Siltronic

0.54

Correlation Coefficient

Codan  Siltronic

Very weak diversification

The 3 months correlation between Codan and Siltronic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Codan Limited and Siltronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siltronic AG and Codan 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 Codan Limited are associated (or correlated) with Siltronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siltronic AG has no effect on the direction of Codan i.e., Codan and Siltronic go up and down completely randomly.

Pair Corralation between Codan and Siltronic

Assuming the 90 days horizon Codan Limited is expected to generate 3.84 times more return on investment than Siltronic. However, Codan is 3.84 times more volatile than Siltronic AG. It trades about 0.16 of its potential returns per unit of risk. Siltronic AG is currently generating about 0.14 per unit of risk. If you would invest  1,059  in Codan Limited on August 13, 2025 and sell it today you would earn a total of  1,315  from holding Codan Limited or generate 124.17% return on investment over 90 days.

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

Codan Limited  vs.  Siltronic AG

Codan Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codan Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Codan reported solid returns over the last few months and may actually be approaching a breakup point.

Siltronic AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Siltronic AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Siltronic reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codan and Siltronic

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

The idea behind Codan Limited and Siltronic 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.