Correlation Between SGS SA and Barry Callebaut

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

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

Diversification Opportunities for SGS SA and Barry Callebaut

0.07

Correlation Coefficient

SGS SA  Barry Callebaut

Significant diversification

The 3 months correlation between SGS and Barry is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG and SGS SA 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 SGS SA are associated (or correlated) with Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of SGS SA i.e., SGS SA and Barry Callebaut go up and down completely randomly.

Pair Corralation between SGS SA and Barry Callebaut

Assuming the 90 days trading horizon SGS SA is expected to generate 7.48 times less return on investment than Barry Callebaut. But when comparing it to its historical volatility, SGS SA is 2.88 times less risky than Barry Callebaut. It trades about 0.08 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  76,000  in Barry Callebaut AG on April 24, 2025 and sell it today you would earn a total of  28,700  from holding Barry Callebaut AG or generate 37.76% return on investment over 90 days.

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

SGS SA  vs.  Barry Callebaut AG

SGS SA

Risk-Adjusted Performance

Modest

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

Barry Callebaut AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barry Callebaut AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Barry Callebaut showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGS SA and Barry Callebaut

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

The idea behind SGS SA and Barry Callebaut 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.