Correlation Between Bucher Industries and Hubersuhner
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Hubersuhner 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 Hubersuhner 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 Hubersuhner AG, you can compare the effects of market volatilities on Bucher Industries and Hubersuhner 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 Hubersuhner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Hubersuhner.
Diversification Opportunities for Bucher Industries and Hubersuhner
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bucher and Hubersuhner is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Hubersuhner AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubersuhner 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 Hubersuhner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubersuhner AG has no effect on the direction of Bucher Industries i.e., Bucher Industries and Hubersuhner go up and down completely randomly.
Pair Corralation between Bucher Industries and Hubersuhner
Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 1.19 times more return on investment than Hubersuhner. However, Bucher Industries is 1.19 times more volatile than Hubersuhner AG. It trades about -0.21 of its potential returns per unit of risk. Hubersuhner AG is currently generating about -0.53 per unit of risk. 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 |
Bucher Industries AG vs. Hubersuhner AG
Performance |
| Timeline |
| Bucher Industries |
| Hubersuhner AG |
Bucher Industries and Hubersuhner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Hubersuhner
The main advantage of trading using opposite Bucher Industries and Hubersuhner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Hubersuhner 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 Hubersuhner will offset losses from the drop in Hubersuhner's long position.| Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. VAT Group AG |
| Hubersuhner vs. Bucher Industries AG | Hubersuhner vs. Komax Holding AG | Hubersuhner vs. Comet Holding AG | Hubersuhner vs. Burckhardt Compression |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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