Correlation Between Barry Callebaut and Burckhardt Compression
Can any of the company-specific risk be diversified away by investing in both Barry Callebaut 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 Barry Callebaut and Burckhardt Compression into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barry Callebaut AG and Burckhardt Compression, you can compare the effects of market volatilities on Barry Callebaut 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 Barry Callebaut with a short position of Burckhardt Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and Burckhardt Compression.
Diversification Opportunities for Barry Callebaut and Burckhardt Compression
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barry and Burckhardt is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG and Burckhardt Compression in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burckhardt Compression and Barry Callebaut 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 Barry Callebaut 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 Barry Callebaut i.e., Barry Callebaut and Burckhardt Compression go up and down completely randomly.
Pair Corralation between Barry Callebaut and Burckhardt Compression
Assuming the 90 days trading horizon Barry Callebaut AG is expected to under-perform the Burckhardt Compression. But the stock apears to be less risky and, when comparing its historical volatility, Barry Callebaut AG is 1.8 times less risky than Burckhardt Compression. The stock trades about -0.35 of its potential returns per unit of risk. The Burckhardt Compression is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 63,400 in Burckhardt Compression on September 13, 2024 and sell it today you would earn a total of 4,000 from holding Burckhardt Compression or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barry Callebaut AG vs. Burckhardt Compression
Performance |
| Timeline |
| Barry Callebaut AG |
| Burckhardt Compression |
Barry Callebaut and Burckhardt Compression Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barry Callebaut and Burckhardt Compression
The main advantage of trading using opposite Barry Callebaut and Burckhardt Compression positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut 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.| Barry Callebaut vs. Givaudan SA | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut vs. EMS CHEMIE HOLDING AG |
| Burckhardt Compression vs. Sulzer AG | Burckhardt Compression vs. Helvetia Holding AG | Burckhardt Compression vs. Swiss Life Holding | Burckhardt Compression vs. Adecco 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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