Correlation Between EMS CHEMIE and Stadler Rail

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

Diversification Opportunities for EMS CHEMIE and Stadler Rail

0.36

Correlation Coefficient

EMS CHEMIE  Stadler Rail

Weak diversification

The 3 months correlation between EMS and Stadler is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING 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 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 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 EMS CHEMIE i.e., EMS CHEMIE and Stadler Rail go up and down completely randomly.

Pair Corralation between EMS CHEMIE and Stadler Rail

Assuming the 90 days trading horizon EMS CHEMIE HOLDING AG is expected to generate 0.84 times more return on investment than Stadler Rail. However, EMS CHEMIE HOLDING AG is 1.2 times less risky than Stadler Rail. It trades about 0.14 of its potential returns per unit of risk. Stadler Rail AG is currently generating about 0.03 per unit of risk. If you would invest  57,100  in EMS CHEMIE HOLDING AG on April 22, 2025 and sell it today you would earn a total of  6,700  from holding EMS CHEMIE HOLDING AG or generate 11.73% 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.  Stadler Rail 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.

Stadler Rail AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stadler Rail AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Stadler Rail is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EMS CHEMIE and Stadler Rail

The main advantage of trading using opposite EMS CHEMIE and Stadler Rail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE 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.

The idea behind EMS CHEMIE HOLDING AG and Stadler Rail 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.