Correlation Between Alpine Select and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Alpine Select and Bachem Holding 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 Alpine Select and Bachem Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpine Select AG and Bachem Holding AG, you can compare the effects of market volatilities on Alpine Select and Bachem Holding 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 Alpine Select with a short position of Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine Select and Bachem Holding.
Diversification Opportunities for Alpine Select and Bachem Holding
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpine and Bachem is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Select AG and Bachem Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bachem Holding AG and Alpine Select 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 Alpine Select AG are associated (or correlated) with Bachem Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bachem Holding AG has no effect on the direction of Alpine Select i.e., Alpine Select and Bachem Holding go up and down completely randomly.
Pair Corralation between Alpine Select and Bachem Holding
Assuming the 90 days trading horizon Alpine Select AG is expected to generate 0.69 times more return on investment than Bachem Holding. However, Alpine Select AG is 1.44 times less risky than Bachem Holding. It trades about 0.03 of its potential returns per unit of risk. Bachem Holding AG is currently generating about -0.09 per unit of risk. If you would invest 745.00 in Alpine Select AG on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Alpine Select AG or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Alpine Select AG vs. Bachem Holding AG
Performance |
| Timeline |
| Alpine Select AG |
| Bachem Holding AG |
Alpine Select and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpine Select and Bachem Holding
The main advantage of trading using opposite Alpine Select and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine Select position performs unexpectedly, Bachem Holding 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 Bachem Holding will offset losses from the drop in Bachem Holding's long position.| Alpine Select vs. Santhera Pharmaceuticals Holding | Alpine Select vs. Newron Pharmaceuticals SpA | Alpine Select vs. Basilea Pharmaceutica AG | Alpine Select vs. Evolva Holding SA |
| Bachem Holding vs. Santhera Pharmaceuticals Holding | Bachem Holding vs. Newron Pharmaceuticals SpA | Bachem Holding vs. Basilea Pharmaceutica AG | Bachem Holding vs. Evolva Holding SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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