Correlation Between Bossard Holding and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both Bossard Holding and Bucher Industries 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 Bucher Industries 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 Bucher Industries AG, you can compare the effects of market volatilities on Bossard Holding and Bucher Industries 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 Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bossard Holding and Bucher Industries.
Diversification Opportunities for Bossard Holding and Bucher Industries
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bossard and Bucher is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bossard Holding AG and Bucher Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucher Industries 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 Bucher Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bucher Industries has no effect on the direction of Bossard Holding i.e., Bossard Holding and Bucher Industries go up and down completely randomly.
Pair Corralation between Bossard Holding and Bucher Industries
Assuming the 90 days trading horizon Bossard Holding AG is expected to under-perform the Bucher Industries. But the stock apears to be less risky and, when comparing its historical volatility, Bossard Holding AG is 1.07 times less risky than Bucher Industries. The stock trades about -0.35 of its potential returns per unit of risk. The Bucher Industries AG is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 35,500 in Bucher Industries AG on August 29, 2024 and sell it today you would lose (1,900) from holding Bucher Industries AG or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bossard Holding AG vs. Bucher Industries AG
Performance |
| Timeline |
| Bossard Holding AG |
| Bucher Industries |
Bossard Holding and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bossard Holding and Bucher Industries
The main advantage of trading using opposite Bossard Holding and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bossard Holding position performs unexpectedly, Bucher Industries 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 Bucher Industries will offset losses from the drop in Bucher Industries' 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 |
| Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. VAT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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