Correlation Between Villars Holding and Chocoladefabriken

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

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

Diversification Opportunities for Villars Holding and Chocoladefabriken

0.47

Correlation Coefficient

Villars Holding  Chocoladefabriken

Very weak diversification

The 3 months correlation between Villars and Chocoladefabriken is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Villars Holding SA and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Villars 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 Villars Holding SA are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Villars Holding i.e., Villars Holding and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Villars Holding and Chocoladefabriken

Assuming the 90 days trading horizon Villars Holding SA is expected to under-perform the Chocoladefabriken. In addition to that, Villars Holding is 1.14 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about -0.06 of its total potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.03 per unit of volatility. If you would invest  1,217,000  in Chocoladefabriken Lindt Spruengli on September 2, 2025 and sell it today you would lose (35,000) from holding Chocoladefabriken Lindt Spruengli or give up 2.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	44.62%
Values	Daily Returns

Villars Holding SA  vs.  Chocoladefabriken Lindt Spruen

Villars Holding SA

Risk-Adjusted Performance

Weakest

Over the last 90 days Villars Holding SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Villars Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

Weakest

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chocoladefabriken 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 Villars Holding and Chocoladefabriken

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

The idea behind Villars Holding SA and Chocoladefabriken Lindt Spruengli 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.