Correlation Between Burckhardt Compression and Metall Zug
Can any of the company-specific risk be diversified away by investing in both Burckhardt Compression and Metall Zug 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 Metall Zug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burckhardt Compression and Metall Zug AG, you can compare the effects of market volatilities on Burckhardt Compression and Metall Zug 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 Metall Zug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burckhardt Compression and Metall Zug.
Diversification Opportunities for Burckhardt Compression and Metall Zug
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Burckhardt and Metall is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Burckhardt Compression and Metall Zug AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metall Zug 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 Metall Zug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metall Zug AG has no effect on the direction of Burckhardt Compression i.e., Burckhardt Compression and Metall Zug go up and down completely randomly.
Pair Corralation between Burckhardt Compression and Metall Zug
Assuming the 90 days trading horizon Burckhardt Compression is expected to generate 0.95 times more return on investment than Metall Zug. However, Burckhardt Compression is 1.05 times less risky than Metall Zug. It trades about 0.03 of its potential returns per unit of risk. Metall Zug AG is currently generating about -0.26 per unit of risk. If you would invest 63,600 in Burckhardt Compression on August 29, 2024 and sell it today you would earn a total of 600.00 from holding Burckhardt Compression or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burckhardt Compression vs. Metall Zug AG
Performance |
| Timeline |
| Burckhardt Compression |
| Metall Zug AG |
Burckhardt Compression and Metall Zug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burckhardt Compression and Metall Zug
The main advantage of trading using opposite Burckhardt Compression and Metall Zug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burckhardt Compression position performs unexpectedly, Metall Zug 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 Metall Zug will offset losses from the drop in Metall Zug's long position.| Burckhardt Compression vs. Helvetia Holding AG | Burckhardt Compression vs. Swiss Life Holding | Burckhardt Compression vs. VAT Group AG |
| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Emmi 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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