Correlation Between ForFarmers and Bergbahnen Engelberg

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

By analyzing existing cross correlation between ForFarmers NV and Bergbahnen Engelberg Truebsee, you can compare the effects of market volatilities on ForFarmers and Bergbahnen Engelberg 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 ForFarmers with a short position of Bergbahnen Engelberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of ForFarmers and Bergbahnen Engelberg.

Diversification Opportunities for ForFarmers and Bergbahnen Engelberg

-0.4

Correlation Coefficient

ForFarmers  Bergbahnen Engelberg

Very good diversification

The 3 months correlation between ForFarmers and Bergbahnen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ForFarmers NV and Bergbahnen Engelberg Truebsee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergbahnen Engelberg and ForFarmers 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 ForFarmers NV are associated (or correlated) with Bergbahnen Engelberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergbahnen Engelberg has no effect on the direction of ForFarmers i.e., ForFarmers and Bergbahnen Engelberg go up and down completely randomly.

Pair Corralation between ForFarmers and Bergbahnen Engelberg

Assuming the 90 days trading horizon ForFarmers NV is expected to under-perform the Bergbahnen Engelberg. In addition to that, ForFarmers is 1.47 times more volatile than Bergbahnen Engelberg Truebsee. It trades about -0.04 of its total potential returns per unit of risk. Bergbahnen Engelberg Truebsee is currently generating about 0.09 per unit of volatility. If you would invest  4,040  in Bergbahnen Engelberg Truebsee on April 24, 2025 and sell it today you would earn a total of  200.00  from holding Bergbahnen Engelberg Truebsee or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

ForFarmers NV  vs.  Bergbahnen Engelberg Truebsee

ForFarmers NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ForFarmers NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ForFarmers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bergbahnen Engelberg

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bergbahnen Engelberg Truebsee are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Bergbahnen Engelberg 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 ForFarmers and Bergbahnen Engelberg

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

The idea behind ForFarmers NV and Bergbahnen Engelberg Truebsee 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.