Correlation Between Bachem Holding and SKAN Group
Can any of the company-specific risk be diversified away by investing in both Bachem Holding and SKAN Group 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 SKAN Group 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 SKAN Group AG, you can compare the effects of market volatilities on Bachem Holding and SKAN Group 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 SKAN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bachem Holding and SKAN Group.
Diversification Opportunities for Bachem Holding and SKAN Group
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bachem and SKAN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bachem Holding AG and SKAN Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAN Group AG 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 SKAN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAN Group AG has no effect on the direction of Bachem Holding i.e., Bachem Holding and SKAN Group go up and down completely randomly.
Pair Corralation between Bachem Holding and SKAN Group
Assuming the 90 days trading horizon Bachem Holding AG is expected to generate 1.53 times more return on investment than SKAN Group. However, Bachem Holding is 1.53 times more volatile than SKAN Group AG. It trades about 0.02 of its potential returns per unit of risk. SKAN Group AG is currently generating about -0.01 per unit of risk. If you would invest 6,413 in Bachem Holding AG on September 2, 2024 and sell it today you would earn a total of 397.00 from holding Bachem Holding AG or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bachem Holding AG vs. SKAN Group AG
Performance |
| Timeline |
| Bachem Holding AG |
| SKAN Group AG |
Bachem Holding and SKAN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bachem Holding and SKAN Group
The main advantage of trading using opposite Bachem Holding and SKAN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bachem Holding position performs unexpectedly, SKAN Group 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 SKAN Group will offset losses from the drop in SKAN Group'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 |
| SKAN Group vs. Straumann Holding AG | SKAN Group vs. Geberit AG | SKAN Group vs. Sika AG | SKAN Group vs. Givaudan 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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