Correlation Between SFS Group and DKSH Holding

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

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

Diversification Opportunities for SFS Group and DKSH Holding

0.42

Correlation Coefficient

SFS Group  DKSH Holding

Very weak diversification

The 3 months correlation between SFS and DKSH is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SFS Group AG and DKSH Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DKSH Holding AG and SFS Group 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 SFS Group AG are associated (or correlated) with DKSH Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DKSH Holding AG has no effect on the direction of SFS Group i.e., SFS Group and DKSH Holding go up and down completely randomly.

Pair Corralation between SFS Group and DKSH Holding

Assuming the 90 days trading horizon SFS Group AG is expected to under-perform the DKSH Holding. But the stock apears to be less risky and, when comparing its historical volatility, SFS Group AG is 1.1 times less risky than DKSH Holding. The stock trades about -0.1 of its potential returns per unit of risk. The DKSH Holding AG is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  5,810  in DKSH Holding AG on August 27, 2025 and sell it today you would lose (280.00) from holding DKSH Holding AG or give up 4.82% of portfolio value over 90 days.

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

SFS Group AG  vs.  DKSH Holding AG

SFS Group AG

Risk-Adjusted Performance

Weakest

Over the last 90 days SFS Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

DKSH Holding AG

Risk-Adjusted Performance

Weakest

Over the last 90 days DKSH Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, DKSH Holding 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 SFS Group and DKSH Holding

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

The idea behind SFS Group AG and DKSH 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.