Correlation Between Bachem Holding and Tecan Group
Can any of the company-specific risk be diversified away by investing in both Bachem Holding and Tecan 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 Tecan 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 Tecan Group AG, you can compare the effects of market volatilities on Bachem Holding and Tecan 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 Tecan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bachem Holding and Tecan Group.
Diversification Opportunities for Bachem Holding and Tecan Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bachem and Tecan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bachem Holding AG and Tecan Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecan 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 Tecan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecan Group AG has no effect on the direction of Bachem Holding i.e., Bachem Holding and Tecan Group go up and down completely randomly.
Pair Corralation between Bachem Holding and Tecan Group
Assuming the 90 days trading horizon Bachem Holding AG is expected to generate 2.33 times more return on investment than Tecan Group. However, Bachem Holding is 2.33 times more volatile than Tecan Group AG. It trades about -0.09 of its potential returns per unit of risk. Tecan Group AG is currently generating about -0.24 per unit of risk. If you would invest 7,135 in Bachem Holding AG on August 29, 2024 and sell it today you would lose (395.00) from holding Bachem Holding AG or give up 5.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bachem Holding AG vs. Tecan Group AG
Performance |
| Timeline |
| Bachem Holding AG |
| Tecan Group AG |
Bachem Holding and Tecan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bachem Holding and Tecan Group
The main advantage of trading using opposite Bachem Holding and Tecan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bachem Holding position performs unexpectedly, Tecan 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 Tecan Group will offset losses from the drop in Tecan Group's long position.| Bachem Holding vs. Santhera Pharmaceuticals Holding | Bachem Holding vs. Newron Pharmaceuticals SpA | Bachem Holding vs. Basilea Pharmaceutica AG | Bachem Holding vs. Evolva Holding SA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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