Correlation Between Burckhardt Compression and Starrag Group
Can any of the company-specific risk be diversified away by investing in both Burckhardt Compression and Starrag 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 Burckhardt Compression and Starrag Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burckhardt Compression and Starrag Group Holding, you can compare the effects of market volatilities on Burckhardt Compression and Starrag 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 Burckhardt Compression with a short position of Starrag Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burckhardt Compression and Starrag Group.
Diversification Opportunities for Burckhardt Compression and Starrag Group
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Burckhardt and Starrag is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Burckhardt Compression and Starrag Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starrag Group Holding 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 Starrag Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starrag Group Holding has no effect on the direction of Burckhardt Compression i.e., Burckhardt Compression and Starrag Group go up and down completely randomly.
Pair Corralation between Burckhardt Compression and Starrag Group
Assuming the 90 days trading horizon Burckhardt Compression is expected to generate 0.48 times more return on investment than Starrag Group. However, Burckhardt Compression is 2.1 times less risky than Starrag Group. It trades about 0.1 of its potential returns per unit of risk. Starrag Group Holding is currently generating about -0.07 per unit of risk. If you would invest 63,600 in Burckhardt Compression on August 28, 2024 and sell it today you would earn a total of 2,100 from holding Burckhardt Compression or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burckhardt Compression vs. Starrag Group Holding
Performance |
| Timeline |
| Burckhardt Compression |
| Starrag Group Holding |
Burckhardt Compression and Starrag Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burckhardt Compression and Starrag Group
The main advantage of trading using opposite Burckhardt Compression and Starrag Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burckhardt Compression position performs unexpectedly, Starrag 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 Starrag Group will offset losses from the drop in Starrag Group's long position.| Burckhardt Compression vs. Helvetia Holding AG | Burckhardt Compression vs. Swiss Life Holding | Burckhardt Compression vs. VAT Group AG |
| Starrag Group vs. Carlo Gavazzi Holding | Starrag Group vs. Mikron Holding AG | Starrag Group vs. Valartis 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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