Correlation Between Barry Callebaut and EMS CHEMIE

Can any of the company-specific risk be diversified away by investing in both Barry Callebaut and EMS CHEMIE 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 EMS CHEMIE 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 EMS CHEMIE HOLDING AG, you can compare the effects of market volatilities on Barry Callebaut and EMS CHEMIE 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 EMS CHEMIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and EMS CHEMIE.

Diversification Opportunities for Barry Callebaut and EMS CHEMIE

0.23

Correlation Coefficient

Barry Callebaut  EMS CHEMIE

Modest diversification

The 3 months correlation between Barry and EMS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and EMS CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS CHEMIE HOLDING 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 EMS CHEMIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS CHEMIE HOLDING has no effect on the direction of Barry Callebaut i.e., Barry Callebaut and EMS CHEMIE go up and down completely randomly.

Pair Corralation between Barry Callebaut and EMS CHEMIE

Assuming the 90 days trading horizon Barry Callebaut AG is expected to generate 2.21 times more return on investment than EMS CHEMIE. However, Barry Callebaut is 2.21 times more volatile than EMS CHEMIE HOLDING AG. It trades about 0.18 of its potential returns per unit of risk. EMS CHEMIE HOLDING AG is currently generating about 0.14 per unit of risk. If you would invest  75,350  in Barry Callebaut AG on April 22, 2025 and sell it today you would earn a total of  25,350  from holding Barry Callebaut AG or generate 33.64% return on investment over 90 days.

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

Barry Callebaut AG  vs.  EMS CHEMIE HOLDING AG

Barry Callebaut AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barry Callebaut AG are ranked lower than 14 (%) 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.

EMS CHEMIE HOLDING

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EMS CHEMIE HOLDING AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, EMS CHEMIE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Barry Callebaut and EMS CHEMIE

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

The idea behind Barry Callebaut AG and EMS CHEMIE HOLDING 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.