Correlation Between Chocoladefabriken and Zug Estates

Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Zug Estates 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 Zug Estates 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 Zug Estates Holding, you can compare the effects of market volatilities on Chocoladefabriken and Zug Estates 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 Zug Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Zug Estates.

Diversification Opportunities for Chocoladefabriken and Zug Estates

0.61

Correlation Coefficient

Chocoladefabriken  Zug Estates

Poor diversification

The 3 months correlation between Chocoladefabriken and Zug is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding 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 Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Zug Estates go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Zug Estates

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 1.13 times more return on investment than Zug Estates. However, Chocoladefabriken is 1.13 times more volatile than Zug Estates Holding. It trades about 0.12 of its potential returns per unit of risk. Zug Estates Holding is currently generating about 0.06 per unit of risk. If you would invest  11,580,000  in Chocoladefabriken Lindt Spruengli on April 24, 2025 and sell it today you would earn a total of  1,040,000  from holding Chocoladefabriken Lindt Spruengli or generate 8.98% 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.  Zug Estates Holding

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.

Zug Estates Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zug Estates Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Zug Estates 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 Zug Estates

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

The idea behind Chocoladefabriken Lindt Spruengli and Zug Estates Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.