Correlation Between Third Point and Chocoladefabriken

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

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

Diversification Opportunities for Third Point and Chocoladefabriken

0.49

Correlation Coefficient

Third Point  Chocoladefabriken

Very weak diversification

The 3 months correlation between Third and Chocoladefabriken is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Third Point Investors and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Third Point 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 Third Point Investors are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Third Point i.e., Third Point and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Third Point and Chocoladefabriken

Assuming the 90 days trading horizon Third Point is expected to generate 3.9 times less return on investment than Chocoladefabriken. In addition to that, Third Point is 1.0 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.06 of its total potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.25 per unit of volatility. If you would invest  11,540,000  in Chocoladefabriken Lindt Spruengli on April 23, 2025 and sell it today you would earn a total of  1,940,000  from holding Chocoladefabriken Lindt Spruengli or generate 16.81% return on investment over 90 days.

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

Third Point Investors  vs.  Chocoladefabriken Lindt Spruen

Third Point Investors

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Third Point Investors are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Third Point is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Spruengli are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Chocoladefabriken unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Third Point and Chocoladefabriken

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

The idea behind Third Point Investors and Chocoladefabriken Lindt Spruengli 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.