Correlation Between Bachem Holding and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both Bachem Holding and Belimo 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 Bachem Holding and Belimo Holding 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 Belimo Holding, you can compare the effects of market volatilities on Bachem Holding and Belimo 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 Bachem Holding with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bachem Holding and Belimo Holding.
Diversification Opportunities for Bachem Holding and Belimo Holding
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bachem and Belimo is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bachem Holding AG and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding 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 Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Bachem Holding i.e., Bachem Holding and Belimo Holding go up and down completely randomly.
Pair Corralation between Bachem Holding and Belimo Holding
Assuming the 90 days trading horizon Bachem Holding AG is expected to under-perform the Belimo Holding. In addition to that, Bachem Holding is 1.26 times more volatile than Belimo Holding. It trades about -0.03 of its total potential returns per unit of risk. Belimo Holding is currently generating about 0.05 per unit of volatility. If you would invest 46,381 in Belimo Holding on November 21, 2024 and sell it today you would earn a total of 21,369 from holding Belimo Holding or generate 46.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bachem Holding AG vs. Belimo Holding
Performance |
| Timeline |
| Bachem Holding AG |
| Belimo Holding |
Bachem Holding and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bachem Holding and Belimo Holding
The main advantage of trading using opposite Bachem Holding and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bachem Holding position performs unexpectedly, Belimo 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 Belimo Holding will offset losses from the drop in Belimo Holding'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 |
| Belimo Holding vs. EMS CHEMIE HOLDING AG | Belimo Holding vs. Geberit AG | Belimo Holding vs. VAT Group AG | Belimo Holding vs. Interroll Holding 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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