Correlation Between Bossard Holding and VAT Group
Can any of the company-specific risk be diversified away by investing in both Bossard Holding and VAT 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 Bossard Holding and VAT Group 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 VAT Group AG, you can compare the effects of market volatilities on Bossard Holding and VAT 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 Bossard Holding with a short position of VAT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bossard Holding and VAT Group.
Diversification Opportunities for Bossard Holding and VAT Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bossard and VAT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bossard Holding AG and VAT Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAT Group 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 VAT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAT Group AG has no effect on the direction of Bossard Holding i.e., Bossard Holding and VAT Group go up and down completely randomly.
Pair Corralation between Bossard Holding and VAT Group
Assuming the 90 days trading horizon Bossard Holding AG is expected to under-perform the VAT Group. But the stock apears to be less risky and, when comparing its historical volatility, Bossard Holding AG is 1.49 times less risky than VAT Group. The stock trades about -0.35 of its potential returns per unit of risk. The VAT Group AG is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 36,900 in VAT Group AG on August 29, 2024 and sell it today you would lose (2,180) from holding VAT Group AG or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bossard Holding AG vs. VAT Group AG
Performance |
| Timeline |
| Bossard Holding AG |
| VAT Group AG |
Bossard Holding and VAT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bossard Holding and VAT Group
The main advantage of trading using opposite Bossard Holding and VAT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bossard Holding position performs unexpectedly, VAT 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 VAT Group will offset losses from the drop in VAT Group'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 |
| VAT Group vs. Interroll Holding AG | VAT Group vs. Comet Holding AG | VAT Group vs. Bossard Holding AG | VAT Group vs. Komax Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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