Correlation Between Bachem Holding and Burckhardt Compression
Can any of the company-specific risk be diversified away by investing in both Bachem Holding and Burckhardt Compression 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 Bachem Holding and Burckhardt Compression into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bachem Holding AG and Burckhardt Compression, you can compare the effects of market volatilities on Bachem Holding and Burckhardt Compression 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 Bachem Holding with a short position of Burckhardt Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bachem Holding and Burckhardt Compression.
Diversification Opportunities for Bachem Holding and Burckhardt Compression
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bachem and Burckhardt is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bachem Holding AG and Burckhardt Compression in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burckhardt Compression and Bachem Holding 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 Bachem Holding AG are associated (or correlated) with Burckhardt Compression. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burckhardt Compression has no effect on the direction of Bachem Holding i.e., Bachem Holding and Burckhardt Compression go up and down completely randomly.
Pair Corralation between Bachem Holding and Burckhardt Compression
Assuming the 90 days trading horizon Bachem Holding is expected to generate 16.4 times less return on investment than Burckhardt Compression. In addition to that, Bachem Holding is 1.49 times more volatile than Burckhardt Compression. It trades about 0.0 of its total potential returns per unit of risk. Burckhardt Compression is currently generating about 0.11 per unit of volatility. If you would invest 63,500 in Burckhardt Compression on September 1, 2024 and sell it today you would earn a total of 2,500 from holding Burckhardt Compression or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bachem Holding AG vs. Burckhardt Compression
Performance |
| Timeline |
| Bachem Holding AG |
| Burckhardt Compression |
Bachem Holding and Burckhardt Compression Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bachem Holding and Burckhardt Compression
The main advantage of trading using opposite Bachem Holding and Burckhardt Compression positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bachem Holding position performs unexpectedly, Burckhardt Compression 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 Burckhardt Compression will offset losses from the drop in Burckhardt Compression's long position.| Bachem Holding vs. Siegfried Holding | Bachem Holding vs. VAT Group AG | Bachem Holding vs. Lonza Group AG | Bachem Holding vs. Straumann Holding AG |
| Burckhardt Compression vs. OC Oerlikon Corp | Burckhardt Compression vs. Helvetia Holding AG | Burckhardt Compression vs. Swiss Life Holding | Burckhardt Compression vs. VAT Group AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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