Correlation Between CPH Chemie and SF Urban

Can any of the company-specific risk be diversified away by investing in both CPH Chemie and SF Urban 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 SF Urban 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 SF Urban Properties, you can compare the effects of market volatilities on CPH Chemie and SF Urban 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 SF Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPH Chemie and SF Urban.

Diversification Opportunities for CPH Chemie and SF Urban

0.87

Correlation Coefficient

CPH Chemie  SF Urban

Very poor diversification

The 3 months correlation between CPH and SFPN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CPH Chemie und and SF Urban Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SF Urban Properties 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 SF Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SF Urban Properties has no effect on the direction of CPH Chemie i.e., CPH Chemie and SF Urban go up and down completely randomly.

Pair Corralation between CPH Chemie and SF Urban

Assuming the 90 days trading horizon CPH Chemie und is expected to generate 2.76 times more return on investment than SF Urban. However, CPH Chemie is 2.76 times more volatile than SF Urban Properties. It trades about 0.21 of its potential returns per unit of risk. SF Urban Properties is currently generating about 0.14 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  1,340  from holding CPH Chemie und or generate 20.94% return on investment over 90 days.

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

CPH Chemie und  vs.  SF Urban Properties

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.

SF Urban Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SF Urban Properties are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SF Urban 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 SF Urban

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

The idea behind CPH Chemie und and SF Urban Properties 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.