Correlation Between Bucher Industries and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Bucher Industries and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Schweiter Technologies.
Diversification Opportunities for Bucher Industries and Schweiter Technologies
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bucher and Schweiter is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Bucher Industries i.e., Bucher Industries and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Bucher Industries and Schweiter Technologies
Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 0.69 times more return on investment than Schweiter Technologies. However, Bucher Industries AG is 1.46 times less risky than Schweiter Technologies. It trades about 0.0 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.06 per unit of risk. If you would invest 35,879 in Bucher Industries AG on August 27, 2024 and sell it today you would lose (2,329) from holding Bucher Industries AG or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bucher Industries AG vs. Schweiter Technologies AG
Performance |
| Timeline |
| Bucher Industries |
| Schweiter Technologies |
Bucher Industries and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and Schweiter Technologies
The main advantage of trading using opposite Bucher Industries and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Bucher Industries vs. OC Oerlikon Corp | Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. VAT Group AG |
| Schweiter Technologies vs. OC Oerlikon Corp | Schweiter Technologies vs. Helvetia Holding AG | Schweiter Technologies vs. Swiss Life Holding | Schweiter Technologies vs. VAT Group 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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