Correlation Between Burckhardt Compression and Mikron Holding
Can any of the company-specific risk be diversified away by investing in both Burckhardt Compression and Mikron 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 Mikron 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 Mikron Holding AG, you can compare the effects of market volatilities on Burckhardt Compression and Mikron 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 Mikron Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burckhardt Compression and Mikron Holding.
Diversification Opportunities for Burckhardt Compression and Mikron Holding
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Burckhardt and Mikron is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Burckhardt Compression and Mikron Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mikron 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 Mikron Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mikron Holding AG has no effect on the direction of Burckhardt Compression i.e., Burckhardt Compression and Mikron Holding go up and down completely randomly.
Pair Corralation between Burckhardt Compression and Mikron Holding
Assuming the 90 days trading horizon Burckhardt Compression is expected to generate 0.72 times more return on investment than Mikron Holding. However, Burckhardt Compression is 1.39 times less risky than Mikron Holding. It trades about 0.05 of its potential returns per unit of risk. Mikron Holding AG is currently generating about -0.12 per unit of risk. If you would invest 60,999 in Burckhardt Compression on September 5, 2024 and sell it today you would earn a total of 4,201 from holding Burckhardt Compression or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Burckhardt Compression vs. Mikron Holding AG
Performance |
| Timeline |
| Burckhardt Compression |
| Mikron Holding AG |
Burckhardt Compression and Mikron Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burckhardt Compression and Mikron Holding
The main advantage of trading using opposite Burckhardt Compression and Mikron Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burckhardt Compression position performs unexpectedly, Mikron 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 Mikron Holding will offset losses from the drop in Mikron Holding's long position.| Burckhardt Compression vs. Emmi AG | Burckhardt Compression vs. EMS CHEMIE HOLDING AG | Burckhardt Compression vs. Barry Callebaut AG | Burckhardt Compression vs. VAT Group AG |
| Mikron Holding vs. Rieter Holding AG | Mikron Holding vs. Feintool International Holding | Mikron Holding vs. Komax Holding AG | Mikron Holding vs. Bucher Industries 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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