Correlation Between EMS CHEMIE and Geberit AG

Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Geberit AG 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 EMS CHEMIE and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMS CHEMIE HOLDING AG and Geberit AG, you can compare the effects of market volatilities on EMS CHEMIE and Geberit AG 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 EMS CHEMIE with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Geberit AG.

Diversification Opportunities for EMS CHEMIE and Geberit AG

0.31

Correlation Coefficient

EMS CHEMIE  Geberit AG

Weak diversification

The 3 months correlation between EMS and Geberit is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Geberit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG and EMS 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 EMS CHEMIE HOLDING AG are associated (or correlated) with Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Geberit AG go up and down completely randomly.

Pair Corralation between EMS CHEMIE and Geberit AG

Assuming the 90 days trading horizon EMS CHEMIE is expected to generate 1.24 times less return on investment than Geberit AG. In addition to that, EMS CHEMIE is 1.29 times more volatile than Geberit AG. It trades about 0.14 of its total potential returns per unit of risk. Geberit AG is currently generating about 0.23 per unit of volatility. If you would invest  53,980  in Geberit AG on April 22, 2025 and sell it today you would earn a total of  8,180  from holding Geberit AG or generate 15.15% return on investment over 90 days.

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

EMS CHEMIE HOLDING AG  vs.  Geberit AG

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 abnormal basic indicators, EMS CHEMIE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Geberit AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Geberit AG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMS CHEMIE and Geberit AG

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

The idea behind EMS CHEMIE HOLDING AG and Geberit 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.