Correlation Between Chocoladefabriken and AdvancedAdvT

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

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

Diversification Opportunities for Chocoladefabriken and AdvancedAdvT

0.7

Correlation Coefficient

Chocoladefabriken  AdvancedAdvT

Poor diversification

The 3 months correlation between Chocoladefabriken and AdvancedAdvT is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and AdvancedAdvT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvancedAdvT and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with AdvancedAdvT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvancedAdvT has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and AdvancedAdvT go up and down completely randomly.

Pair Corralation between Chocoladefabriken and AdvancedAdvT

Assuming the 90 days trading horizon Chocoladefabriken is expected to generate 1.34 times less return on investment than AdvancedAdvT. But when comparing it to its historical volatility, Chocoladefabriken Lindt Spruengli is 1.84 times less risky than AdvancedAdvT. It trades about 0.25 of its potential returns per unit of risk. AdvancedAdvT is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  15,000  in AdvancedAdvT on April 23, 2025 and sell it today you would earn a total of  3,250  from holding AdvancedAdvT or generate 21.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  AdvancedAdvT

Chocoladefabriken Lindt

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Chocoladefabriken unveiled solid returns over the last few months and may actually be approaching a breakup point.

AdvancedAdvT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AdvancedAdvT are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AdvancedAdvT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chocoladefabriken and AdvancedAdvT

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

The idea behind Chocoladefabriken Lindt Spruengli and AdvancedAdvT 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.