Correlation Between Bucher Industries and Interroll Holding
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Interroll 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 Interroll 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 Interroll Holding AG, you can compare the effects of market volatilities on Bucher Industries and Interroll 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 Interroll Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Interroll Holding.
Diversification Opportunities for Bucher Industries and Interroll Holding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bucher and Interroll is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Interroll Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interroll 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 Interroll Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interroll Holding has no effect on the direction of Bucher Industries i.e., Bucher Industries and Interroll Holding go up and down completely randomly.
Pair Corralation between Bucher Industries and Interroll Holding
Assuming the 90 days trading horizon Bucher Industries AG is expected to under-perform the Interroll Holding. But the stock apears to be less risky and, when comparing its historical volatility, Bucher Industries AG is 1.63 times less risky than Interroll Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Interroll Holding AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 254,585 in Interroll Holding AG on August 31, 2024 and sell it today you would lose (36,585) from holding Interroll Holding AG or give up 14.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bucher Industries AG vs. Interroll Holding AG
Performance |
| Timeline |
| Bucher Industries |
| Interroll Holding |
Bucher Industries and Interroll Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Interroll Holding
The main advantage of trading using opposite Bucher Industries and Interroll Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Interroll 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 Interroll Holding will offset losses from the drop in Interroll 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 |
| Interroll Holding vs. Belimo Holding | Interroll Holding vs. Bachem Holding AG | Interroll Holding vs. VAT Group AG | Interroll Holding vs. Kardex |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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