Correlation Between Barry Callebaut and Emmi AG

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Can any of the company-specific risk be diversified away by investing in both Barry Callebaut and Emmi AG 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 Barry Callebaut and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barry Callebaut AG and Emmi AG, you can compare the effects of market volatilities on Barry Callebaut and Emmi AG 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 Barry Callebaut with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Emmi AG.

Diversification Opportunities for Barry Callebaut and Emmi AG

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Barry and Emmi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Barry Callebaut 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 Barry Callebaut AG are associated (or correlated) with Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Barry Callebaut i.e., Barry Callebaut and Emmi AG go up and down completely randomly.

Pair Corralation between Barry Callebaut and Emmi AG

Assuming the 90 days trading horizon Barry Callebaut AG is expected to generate 3.02 times more return on investment than Emmi AG. However, Barry Callebaut is 3.02 times more volatile than Emmi AG. It trades about 0.17 of its potential returns per unit of risk. Emmi AG is currently generating about -0.06 per unit of risk. If you would invest  76,750  in Barry Callebaut AG on April 23, 2025 and sell it today you would earn a total of  24,450  from holding Barry Callebaut AG or generate 31.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Barry Callebaut AG  vs.  Emmi AG

 Performance 
       Timeline  
Barry Callebaut AG 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Barry Callebaut AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Barry Callebaut showed solid returns over the last few months and may actually be approaching a breakup point.
Emmi AG 

Risk-Adjusted Performance

Very Weak

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

Barry Callebaut and Emmi AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barry Callebaut and Emmi AG

The main advantage of trading using opposite Barry Callebaut and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut position performs unexpectedly, Emmi AG 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 Emmi AG will offset losses from the drop in Emmi AG's long position.
The idea behind Barry Callebaut AG and Emmi 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.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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