Correlation Between Barry Callebaut and Chocoladefabriken

Can any of the company-specific risk be diversified away by investing in both Barry Callebaut 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 Barry Callebaut and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Barry Callebaut 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 Barry Callebaut with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Chocoladefabriken.

Diversification Opportunities for Barry Callebaut and Chocoladefabriken

0.85

Correlation Coefficient

Barry Callebaut  Chocoladefabriken

Very poor diversification

The 3 months correlation between Barry and Chocoladefabriken is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 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 Barry Callebaut i.e., Barry Callebaut and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Barry Callebaut and Chocoladefabriken

Assuming the 90 days trading horizon Barry Callebaut AG is expected to generate 2.97 times more return on investment than Chocoladefabriken. However, Barry Callebaut is 2.97 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.18 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.25 per unit of risk. If you would invest  75,350  in Barry Callebaut AG on April 21, 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	Strong
Accuracy	100.0%
Values	Daily Returns

Barry Callebaut AG  vs.  Chocoladefabriken Lindt Spruen

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.

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 fairly abnormal basic indicators, Chocoladefabriken showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barry Callebaut and Chocoladefabriken

The main advantage of trading using opposite Barry Callebaut and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut 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 Barry Callebaut AG and Chocoladefabriken Lindt Spruengli 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.