Correlation Between Burckhardt Compression and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Burckhardt Compression and Bachem 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 Burckhardt Compression and Bachem Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burckhardt Compression and Bachem Holding AG, you can compare the effects of market volatilities on Burckhardt Compression and Bachem 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 Burckhardt Compression with a short position of Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burckhardt Compression and Bachem Holding.
Diversification Opportunities for Burckhardt Compression and Bachem Holding
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burckhardt and Bachem is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Burckhardt Compression and Bachem Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bachem Holding AG and Burckhardt Compression 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 Burckhardt Compression are associated (or correlated) with Bachem Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bachem Holding AG has no effect on the direction of Burckhardt Compression i.e., Burckhardt Compression and Bachem Holding go up and down completely randomly.
Pair Corralation between Burckhardt Compression and Bachem Holding
Assuming the 90 days trading horizon Burckhardt Compression is expected to generate 0.67 times more return on investment than Bachem Holding. However, Burckhardt Compression is 1.49 times less risky than Bachem Holding. It trades about 0.11 of its potential returns per unit of risk. Bachem Holding AG is currently generating about 0.0 per unit of risk. 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 |
Burckhardt Compression vs. Bachem Holding AG
Performance |
| Timeline |
| Burckhardt Compression |
| Bachem Holding AG |
Burckhardt Compression and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burckhardt Compression and Bachem Holding
The main advantage of trading using opposite Burckhardt Compression and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burckhardt Compression position performs unexpectedly, Bachem 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 Bachem Holding will offset losses from the drop in Bachem Holding's long position.| Burckhardt Compression vs. OC Oerlikon Corp | Burckhardt Compression vs. Helvetia Holding AG | Burckhardt Compression vs. Swiss Life Holding | Burckhardt Compression vs. VAT Group AG |
| Bachem Holding vs. Siegfried Holding | Bachem Holding vs. VAT Group AG | Bachem Holding vs. Lonza Group AG | Bachem Holding vs. Straumann 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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