Correlation Between Chocoladefabriken and PIMCO Short

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

Diversification Opportunities for Chocoladefabriken and PIMCO Short

0.81

Correlation Coefficient

Chocoladefabriken  PIMCO Short

Very poor diversification

The 3 months correlation between Chocoladefabriken and PIMCO is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term 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 PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and PIMCO Short go up and down completely randomly.

Pair Corralation between Chocoladefabriken and PIMCO Short

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 8.47 times more return on investment than PIMCO Short. However, Chocoladefabriken is 8.47 times more volatile than PIMCO Short Term High. It trades about 0.07 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.29 per unit of risk. If you would invest  1,199,000  in Chocoladefabriken Lindt Spruengli on April 24, 2025 and sell it today you would earn a total of  60,000  from holding Chocoladefabriken Lindt Spruengli or generate 5.0% return on investment over 90 days.

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

Chocoladefabriken Lindt Spruen  vs.  PIMCO Short Term High

Chocoladefabriken Lindt

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chocoladefabriken is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PIMCO Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Short Term High are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, PIMCO Short is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chocoladefabriken and PIMCO Short

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

The idea behind Chocoladefabriken Lindt Spruengli and PIMCO Short Term High 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.