Correlation Between Emmi AG and Stadler Rail
Can any of the company-specific risk be diversified away by investing in both Emmi AG and Stadler Rail 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 Emmi AG and Stadler Rail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmi AG and Stadler Rail AG, you can compare the effects of market volatilities on Emmi AG and Stadler Rail 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 Emmi AG with a short position of Stadler Rail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmi AG and Stadler Rail.
Diversification Opportunities for Emmi AG and Stadler Rail
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emmi and Stadler is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Stadler Rail AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadler Rail AG and Emmi AG 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 Emmi AG are associated (or correlated) with Stadler Rail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadler Rail AG has no effect on the direction of Emmi AG i.e., Emmi AG and Stadler Rail go up and down completely randomly.
Pair Corralation between Emmi AG and Stadler Rail
Assuming the 90 days trading horizon Emmi AG is expected to under-perform the Stadler Rail. But the stock apears to be less risky and, when comparing its historical volatility, Emmi AG is 1.62 times less risky than Stadler Rail. The stock trades about -0.06 of its potential returns per unit of risk. The Stadler Rail AG is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,061 in Stadler Rail AG on April 23, 2025 and sell it today you would lose (11.00) from holding Stadler Rail AG or give up 0.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Emmi AG vs. Stadler Rail AG
Performance |
Timeline |
Emmi AG |
Stadler Rail AG |
Emmi AG and Stadler Rail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Emmi AG and Stadler Rail
The main advantage of trading using opposite Emmi AG and Stadler Rail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmi AG position performs unexpectedly, Stadler Rail 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 Stadler Rail will offset losses from the drop in Stadler Rail's long position.Emmi AG vs. Bucher Industries AG | Emmi AG vs. EMS CHEMIE HOLDING AG | Emmi AG vs. Barry Callebaut AG | Emmi AG vs. Geberit AG |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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