Correlation Between Burkhalter Holding and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both Burkhalter 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 Burkhalter 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 Burkhalter Holding AG and Bucher Industries AG, you can compare the effects of market volatilities on Burkhalter 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 Burkhalter Holding with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burkhalter Holding and Bucher Industries.
Diversification Opportunities for Burkhalter Holding and Bucher Industries
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Burkhalter and Bucher is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Burkhalter 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 Burkhalter 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 Burkhalter 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 Burkhalter Holding i.e., Burkhalter Holding and Bucher Industries go up and down completely randomly.
Pair Corralation between Burkhalter Holding and Bucher Industries
Assuming the 90 days trading horizon Burkhalter Holding is expected to generate 1.59 times less return on investment than Bucher Industries. But when comparing it to its historical volatility, Burkhalter Holding AG is 1.53 times less risky than Bucher Industries. It trades about 0.34 of its potential returns per unit of risk. Bucher Industries AG is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 34,200 in Bucher Industries AG on November 27, 2024 and sell it today you would earn a total of 3,550 from holding Bucher Industries AG or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burkhalter Holding AG vs. Bucher Industries AG
Performance |
| Timeline |
| Burkhalter Holding |
| Bucher Industries |
Burkhalter Holding and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burkhalter Holding and Bucher Industries
The main advantage of trading using opposite Burkhalter Holding and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burkhalter 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.| Burkhalter Holding vs. mobilezone ag | Burkhalter Holding vs. Cembra Money Bank | Burkhalter Holding vs. OC Oerlikon Corp | Burkhalter Holding vs. Banque Cantonale |
| Bucher Industries vs. Emmi AG | Bucher Industries vs. EMS CHEMIE HOLDING AG | Bucher Industries vs. Barry Callebaut AG | Bucher Industries vs. Sulzer 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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