Correlation Between Zehnder and EFG International

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

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

Diversification Opportunities for Zehnder and EFG International

0.95

Correlation Coefficient

Zehnder  EFG International

Almost no diversification

The 3 months correlation between Zehnder and EFG is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zehnder and EFG International AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFG International and Zehnder 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 Zehnder are associated (or correlated) with EFG International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFG International has no effect on the direction of Zehnder i.e., Zehnder and EFG International go up and down completely randomly.

Pair Corralation between Zehnder and EFG International

Assuming the 90 days trading horizon Zehnder is expected to generate 1.74 times more return on investment than EFG International. However, Zehnder is 1.74 times more volatile than EFG International AG. It trades about 0.22 of its potential returns per unit of risk. EFG International AG is currently generating about 0.37 per unit of risk. If you would invest  5,210  in Zehnder on April 24, 2025 and sell it today you would earn a total of  1,840  from holding Zehnder or generate 35.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Zehnder  vs.  EFG International AG

Zehnder

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zehnder are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Zehnder showed solid returns over the last few months and may actually be approaching a breakup point.

EFG International

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in EFG International AG are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EFG International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zehnder and EFG International

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

The idea behind Zehnder and EFG International 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.