Correlation Between ARISTOCRAT LEISURE and Semperit Aktiengesellscha

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

By analyzing existing cross correlation between ARISTOCRAT LEISURE and Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on ARISTOCRAT LEISURE and Semperit Aktiengesellscha 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 ARISTOCRAT LEISURE with a short position of Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and Semperit Aktiengesellscha.

Diversification Opportunities for ARISTOCRAT LEISURE and Semperit Aktiengesellscha

-0.44

Correlation Coefficient

ARISTOCRAT LEISURE  Semperit Aktiengesellscha

Very good diversification

The 3 months correlation between ARISTOCRAT and Semperit is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE are associated (or correlated) with Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between ARISTOCRAT LEISURE and Semperit Aktiengesellscha

Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 1.27 times less return on investment than Semperit Aktiengesellscha. But when comparing it to its historical volatility, ARISTOCRAT LEISURE is 1.66 times less risky than Semperit Aktiengesellscha. It trades about 0.06 of its potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,250  in Semperit Aktiengesellschaft Holding on April 25, 2025 and sell it today you would earn a total of  56.00  from holding Semperit Aktiengesellschaft Holding or generate 4.48% return on investment over 90 days.

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

ARISTOCRAT LEISURE  vs.  Semperit Aktiengesellschaft Ho

ARISTOCRAT LEISURE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ARISTOCRAT LEISURE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ARISTOCRAT LEISURE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Semperit Aktiengesellscha

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Semperit Aktiengesellscha is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ARISTOCRAT LEISURE and Semperit Aktiengesellscha

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

The idea behind ARISTOCRAT LEISURE and Semperit Aktiengesellschaft Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.