Correlation Between Givaudan and Straumann Holding

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

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

Diversification Opportunities for Givaudan and Straumann Holding

0.58

Correlation Coefficient

Givaudan  Straumann Holding

Very weak diversification

The 3 months correlation between Givaudan and Straumann is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Givaudan 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 Givaudan SA are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Givaudan i.e., Givaudan and Straumann Holding go up and down completely randomly.

Pair Corralation between Givaudan and Straumann Holding

Assuming the 90 days trading horizon Givaudan is expected to generate 75.25 times less return on investment than Straumann Holding. But when comparing it to its historical volatility, Givaudan SA is 1.79 times less risky than Straumann Holding. It trades about 0.0 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,712  in Straumann Holding AG on April 21, 2025 and sell it today you would earn a total of  863.00  from holding Straumann Holding AG or generate 8.89% return on investment over 90 days.

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

Givaudan SA  vs.  Straumann Holding AG

Givaudan SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Givaudan SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Givaudan is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Straumann Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Straumann Holding AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Straumann Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Givaudan and Straumann Holding

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

The idea behind Givaudan SA and Straumann Holding 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.