Correlation Between Tootsie Roll and Cloetta AB

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

By analyzing existing cross correlation between Tootsie Roll Industries and Cloetta AB, you can compare the effects of market volatilities on Tootsie Roll and Cloetta AB 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 Tootsie Roll with a short position of Cloetta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and Cloetta AB.

Diversification Opportunities for Tootsie Roll and Cloetta AB

0.22

Correlation Coefficient

Tootsie Roll  Cloetta AB

Modest diversification

The 3 months correlation between Tootsie and Cloetta is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and Cloetta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloetta AB and Tootsie Roll 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 Tootsie Roll Industries are associated (or correlated) with Cloetta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloetta AB has no effect on the direction of Tootsie Roll i.e., Tootsie Roll and Cloetta AB go up and down completely randomly.

Pair Corralation between Tootsie Roll and Cloetta AB

Assuming the 90 days horizon Tootsie Roll is expected to generate 1.24 times less return on investment than Cloetta AB. But when comparing it to its historical volatility, Tootsie Roll Industries is 1.86 times less risky than Cloetta AB. It trades about 0.14 of its potential returns per unit of risk. Cloetta AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  243.00  in Cloetta AB on April 22, 2025 and sell it today you would earn a total of  48.00  from holding Cloetta AB or generate 19.75% return on investment over 90 days.

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

Tootsie Roll Industries  vs.  Cloetta AB

Tootsie Roll Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tootsie Roll Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Tootsie Roll reported solid returns over the last few months and may actually be approaching a breakup point.

Cloetta AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cloetta AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cloetta AB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tootsie Roll and Cloetta AB

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

The idea behind Tootsie Roll Industries and Cloetta AB 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.