Correlation Between Sika AG and Albemarle
Can any of the company-specific risk be diversified away by investing in both Sika AG and Albemarle 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 Sika AG and Albemarle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sika AG ADR and Albemarle, you can compare the effects of market volatilities on Sika AG and Albemarle 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 Sika AG with a short position of Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sika AG and Albemarle.
Diversification Opportunities for Sika AG and Albemarle
Pay attention - limited upside
The 3 months correlation between Sika and Albemarle is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sika AG ADR and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle and Sika AG 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 Sika AG ADR are associated (or correlated) with Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Sika AG i.e., Sika AG and Albemarle go up and down completely randomly.
Pair Corralation between Sika AG and Albemarle
Assuming the 90 days horizon Sika AG ADR is expected to under-perform the Albemarle. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sika AG ADR is 1.85 times less risky than Albemarle. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Albemarle is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,522 in Albemarle on September 11, 2025 and sell it today you would earn a total of 1,936 from holding Albemarle or generate 54.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sika AG ADR vs. Albemarle
Performance |
| Timeline |
| Sika AG ADR |
| Albemarle |
Sika AG and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sika AG and Albemarle
The main advantage of trading using opposite Sika AG and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sika AG position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Sika AG vs. Arkema SA ADR | Sika AG vs. Johnson Matthey Plc | Sika AG vs. Croda International Plc | Sika AG vs. Sumitomo Chemical Co |
| Albemarle vs. Dongjiang Environmental | Albemarle vs. DATA Communications Management | Albemarle vs. NorthPoint Communications Group | Albemarle vs. AeroVironment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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