Correlation Between CPH Chemie and Calida Holding

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

By analyzing existing cross correlation between CPH Chemie und and Calida Holding AG, you can compare the effects of market volatilities on CPH Chemie and Calida Holding 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 CPH Chemie with a short position of Calida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPH Chemie and Calida Holding.

Diversification Opportunities for CPH Chemie and Calida Holding

-0.42

Correlation Coefficient

CPH Chemie  Calida Holding

Very good diversification

The 3 months correlation between CPH and Calida is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CPH Chemie und and Calida Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calida Holding AG and CPH Chemie 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 CPH Chemie und are associated (or correlated) with Calida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calida Holding AG has no effect on the direction of CPH Chemie i.e., CPH Chemie and Calida Holding go up and down completely randomly.

Pair Corralation between CPH Chemie and Calida Holding

Assuming the 90 days trading horizon CPH Chemie und is expected to generate 0.7 times more return on investment than Calida Holding. However, CPH Chemie und is 1.43 times less risky than Calida Holding. It trades about 0.2 of its potential returns per unit of risk. Calida Holding AG is currently generating about -0.03 per unit of risk. If you would invest  6,400  in CPH Chemie und on April 22, 2025 and sell it today you would earn a total of  1,300  from holding CPH Chemie und or generate 20.31% return on investment over 90 days.

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

CPH Chemie und  vs.  Calida Holding AG

CPH Chemie und

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CPH Chemie und are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CPH Chemie showed solid returns over the last few months and may actually be approaching a breakup point.

Calida Holding AG

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CPH Chemie and Calida Holding

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

The idea behind CPH Chemie und and Calida 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .