Correlation Between Bucher Industries and Burkhalter Holding
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Burkhalter 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 Bucher Industries and Burkhalter Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bucher Industries AG and Burkhalter Holding AG, you can compare the effects of market volatilities on Bucher Industries and Burkhalter 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 Bucher Industries with a short position of Burkhalter Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Burkhalter Holding.
Diversification Opportunities for Bucher Industries and Burkhalter Holding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bucher and Burkhalter is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Burkhalter Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burkhalter Holding and Bucher Industries 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 Bucher Industries AG are associated (or correlated) with Burkhalter Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burkhalter Holding has no effect on the direction of Bucher Industries i.e., Bucher Industries and Burkhalter Holding go up and down completely randomly.
Pair Corralation between Bucher Industries and Burkhalter Holding
Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 1.53 times more return on investment than Burkhalter Holding. However, Bucher Industries is 1.53 times more volatile than Burkhalter Holding AG. It trades about 0.35 of its potential returns per unit of risk. Burkhalter Holding AG is currently generating about 0.34 per unit of risk. 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 |
Bucher Industries AG vs. Burkhalter Holding AG
Performance |
| Timeline |
| Bucher Industries |
| Burkhalter Holding |
Bucher Industries and Burkhalter Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Burkhalter Holding
The main advantage of trading using opposite Bucher Industries and Burkhalter Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Burkhalter 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 Burkhalter Holding will offset losses from the drop in Burkhalter Holding's long position.| Bucher Industries vs. Emmi AG | Bucher Industries vs. EMS CHEMIE HOLDING AG | Bucher Industries vs. Barry Callebaut AG | Bucher Industries vs. Sulzer AG |
| Burkhalter Holding vs. mobilezone ag | Burkhalter Holding vs. Cembra Money Bank | Burkhalter Holding vs. OC Oerlikon Corp | Burkhalter Holding vs. Banque Cantonale |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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