Correlation Between Top GloveBhd and Straumann Holding

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

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

Diversification Opportunities for Top GloveBhd and Straumann Holding

-0.15

Correlation Coefficient

Top GloveBhd  Straumann Holding

Good diversification

The 3 months correlation between Top and Straumann is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Top Glove and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Top GloveBhd 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 Top Glove are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Top GloveBhd i.e., Top GloveBhd and Straumann Holding go up and down completely randomly.

Pair Corralation between Top GloveBhd and Straumann Holding

Assuming the 90 days horizon Top GloveBhd is expected to generate 1.27 times less return on investment than Straumann Holding. In addition to that, Top GloveBhd is 1.57 times more volatile than Straumann Holding AG. It trades about 0.02 of its total potential returns per unit of risk. Straumann Holding AG is currently generating about 0.03 per unit of volatility. If you would invest  1,245  in Straumann Holding AG on May 7, 2025 and sell it today you would earn a total of  31.00  from holding Straumann Holding AG or generate 2.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Top Glove  vs.  Straumann Holding AG

Top GloveBhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Top Glove are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Top GloveBhd is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Straumann Holding

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Straumann Holding AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Straumann Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Top GloveBhd and Straumann Holding

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

The idea behind Top Glove and Straumann 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.

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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.