Correlation Between Chocoladefabriken and Berner Kantonalbank

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

By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and Berner Kantonalbank AG, you can compare the effects of market volatilities on Chocoladefabriken and Berner Kantonalbank 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 Chocoladefabriken with a short position of Berner Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Berner Kantonalbank.

Diversification Opportunities for Chocoladefabriken and Berner Kantonalbank

0.68

Correlation Coefficient

Chocoladefabriken  Berner Kantonalbank

Poor diversification

The 3 months correlation between Chocoladefabriken and Berner is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Berner Kantonalbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berner Kantonalbank and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with Berner Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berner Kantonalbank has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Berner Kantonalbank go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Berner Kantonalbank

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 2.16 times more return on investment than Berner Kantonalbank. However, Chocoladefabriken is 2.16 times more volatile than Berner Kantonalbank AG. It trades about 0.12 of its potential returns per unit of risk. Berner Kantonalbank AG is currently generating about 0.13 per unit of risk. If you would invest  11,500,000  in Chocoladefabriken Lindt Spruengli on April 25, 2025 and sell it today you would earn a total of  1,060,000  from holding Chocoladefabriken Lindt Spruengli or generate 9.22% return on investment over 90 days.

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

Chocoladefabriken Lindt Spruen  vs.  Berner Kantonalbank AG

Chocoladefabriken Lindt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chocoladefabriken may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Berner Kantonalbank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Berner Kantonalbank AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Berner Kantonalbank 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 Chocoladefabriken and Berner Kantonalbank

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

The idea behind Chocoladefabriken Lindt Spruengli and Berner Kantonalbank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.