Correlation Between Bucher Industries and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Emmi AG 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 Emmi AG 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 Emmi AG, you can compare the effects of market volatilities on Bucher Industries and Emmi AG 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 Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Emmi AG.
Diversification Opportunities for Bucher Industries and Emmi AG
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bucher and Emmi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG 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 Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Bucher Industries i.e., Bucher Industries and Emmi AG go up and down completely randomly.
Pair Corralation between Bucher Industries and Emmi AG
Assuming the 90 days trading horizon Bucher Industries AG is expected to under-perform the Emmi AG. In addition to that, Bucher Industries is 1.09 times more volatile than Emmi AG. It trades about 0.0 of its total potential returns per unit of risk. Emmi AG is currently generating about 0.01 per unit of volatility. If you would invest 77,721 in Emmi AG on August 29, 2024 and sell it today you would earn a total of 479.00 from holding Emmi AG or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bucher Industries AG vs. Emmi AG
Performance |
| Timeline |
| Bucher Industries |
| Emmi AG |
Bucher Industries and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Emmi AG
The main advantage of trading using opposite Bucher Industries and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Emmi AG 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 Emmi AG will offset losses from the drop in Emmi AG's long position.| Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. VAT Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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