Correlation Between Bucher Industries and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Sulzer 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 Sulzer 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 Sulzer AG, you can compare the effects of market volatilities on Bucher Industries and Sulzer 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 Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Sulzer AG.
Diversification Opportunities for Bucher Industries and Sulzer AG
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bucher and Sulzer is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer 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 Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Bucher Industries i.e., Bucher Industries and Sulzer AG go up and down completely randomly.
Pair Corralation between Bucher Industries and Sulzer AG
Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 0.82 times more return on investment than Sulzer AG. However, Bucher Industries AG is 1.22 times less risky than Sulzer AG. It trades about -0.21 of its potential returns per unit of risk. Sulzer AG is currently generating about -0.19 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bucher Industries AG vs. Sulzer AG
Performance |
| Timeline |
| Bucher Industries |
| Sulzer AG |
Bucher Industries and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Sulzer AG
The main advantage of trading using opposite Bucher Industries and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Sulzer 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 Sulzer AG will offset losses from the drop in Sulzer AG'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 |
| Sulzer AG vs. Bucher Industries AG | Sulzer AG vs. Comet Holding AG | Sulzer AG vs. Belimo Holding | Sulzer AG vs. Komax Holding 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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