Correlation Between Bossard Holding and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Bossard Holding 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 Bossard Holding and Bachem Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bossard Holding AG and Bachem Holding AG, you can compare the effects of market volatilities on Bossard Holding 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 Bossard Holding with a short position of Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bossard Holding and Bachem Holding.
Diversification Opportunities for Bossard Holding and Bachem Holding
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bossard and Bachem is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bossard Holding AG 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 Bossard Holding 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 Bossard Holding AG 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 Bossard Holding i.e., Bossard Holding and Bachem Holding go up and down completely randomly.
Pair Corralation between Bossard Holding and Bachem Holding
Assuming the 90 days trading horizon Bossard Holding AG is expected to generate 0.72 times more return on investment than Bachem Holding. However, Bossard Holding AG is 1.39 times less risky than Bachem Holding. It trades about -0.01 of its potential returns per unit of risk. Bachem Holding AG is currently generating about -0.02 per unit of risk. If you would invest 21,450 in Bossard Holding AG on August 31, 2024 and sell it today you would lose (1,650) from holding Bossard Holding AG or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.62% |
| Values | Daily Returns |
Bossard Holding AG vs. Bachem Holding AG
Performance |
| Timeline |
| Bossard Holding AG |
| Bachem Holding AG |
Bossard Holding and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bossard Holding and Bachem Holding
The main advantage of trading using opposite Bossard Holding and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bossard Holding 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.| Bossard Holding vs. VAT Group AG | Bossard Holding vs. Bucher Industries AG | Bossard Holding vs. EMS CHEMIE HOLDING AG | Bossard Holding vs. Komax Holding AG |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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