Correlation Between Cloetta AB and Chocoladefabriken

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

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

Diversification Opportunities for Cloetta AB and Chocoladefabriken

0.74

Correlation Coefficient

Cloetta AB  Chocoladefabriken

Poor diversification

The 3 months correlation between Cloetta and Chocoladefabriken is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cloetta AB and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Cloetta AB 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 Cloetta AB 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 Cloetta AB i.e., Cloetta AB and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Cloetta AB and Chocoladefabriken

Assuming the 90 days horizon Cloetta AB is expected to generate 8.82 times less return on investment than Chocoladefabriken. But when comparing it to its historical volatility, Cloetta AB is 3.27 times less risky than Chocoladefabriken. It trades about 0.05 of its potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  631,500  in Chocoladefabriken Lindt Sprngli on April 24, 2025 and sell it today you would earn a total of  738,500  from holding Chocoladefabriken Lindt Sprngli or generate 116.94% return on investment over 90 days.

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

Cloetta AB  vs.  Chocoladefabriken Lindt Sprngl

Cloetta AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cloetta AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cloetta AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Chocoladefabriken Lindt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Sprngli are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Chocoladefabriken unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cloetta AB and Chocoladefabriken

The main advantage of trading using opposite Cloetta AB and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloetta AB 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 Cloetta AB and Chocoladefabriken Lindt Sprngli 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.