Correlation Between Chocoladefabriken and Experian Plc

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

By analyzing existing cross correlation between Chocoladefabriken Lindt Sprngli and Experian plc, you can compare the effects of market volatilities on Chocoladefabriken and Experian Plc 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 Experian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Experian Plc.

Diversification Opportunities for Chocoladefabriken and Experian Plc

0.72

Correlation Coefficient

Chocoladefabriken  Experian Plc

Poor diversification

The 3 months correlation between Chocoladefabriken and Experian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Sprngl and Experian plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Experian plc 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 Sprngli are associated (or correlated) with Experian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Experian plc has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Experian Plc go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Experian Plc

Assuming the 90 days trading horizon Chocoladefabriken Lindt Sprngli is expected to generate 9.55 times more return on investment than Experian Plc. However, Chocoladefabriken is 9.55 times more volatile than Experian plc. It trades about 0.14 of its potential returns per unit of risk. Experian plc is currently generating about 0.14 per unit of risk. If you would invest  631,500  in Chocoladefabriken Lindt Sprngli on April 24, 2025 and sell it today you would earn a total of  828,500  from holding Chocoladefabriken Lindt Sprngli or generate 131.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Chocoladefabriken Lindt Sprngl  vs.  Experian plc

Chocoladefabriken Lindt

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Sprngli are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chocoladefabriken unveiled solid returns over the last few months and may actually be approaching a breakup point.

Experian plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Experian plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Experian Plc may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Chocoladefabriken and Experian Plc

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

The idea behind Chocoladefabriken Lindt Sprngli and Experian plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.