Correlation Between Buhler Industries and Uniteds

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Can any of the company-specific risk be diversified away by investing in both Buhler Industries and Uniteds 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 Buhler Industries and Uniteds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buhler Industries and Uniteds Limited, you can compare the effects of market volatilities on Buhler Industries and Uniteds 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 Buhler Industries with a short position of Uniteds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and Uniteds.

Diversification Opportunities for Buhler Industries and Uniteds

BuhlerUnitedsDiversified AwayBuhlerUnitedsDiversified Away100%
0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Buhler and Uniteds is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries and Uniteds Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniteds Limited and Buhler 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 Buhler Industries are associated (or correlated) with Uniteds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniteds Limited has no effect on the direction of Buhler Industries i.e., Buhler Industries and Uniteds go up and down completely randomly.

Pair Corralation between Buhler Industries and Uniteds

Assuming the 90 days trading horizon Buhler Industries is expected to generate 14.66 times more return on investment than Uniteds. However, Buhler Industries is 14.66 times more volatile than Uniteds Limited. It trades about 0.22 of its potential returns per unit of risk. Uniteds Limited is currently generating about 0.25 per unit of risk. If you would invest  315.00  in Buhler Industries on November 14, 2024 and sell it today you would earn a total of  400.00  from holding Buhler Industries or generate 126.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Buhler Industries  vs.  Uniteds Limited

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 010203040
JavaScript chart by amCharts 3.21.15BUI UNC
       Timeline  
Buhler Industries 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Buhler Industries are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Buhler Industries displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb34567
Uniteds Limited 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Uniteds Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Uniteds may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb126128130132134136138140142

Buhler Industries and Uniteds Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.93-6.68-4.44-2.20.02.394.857.329.7912.26 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15BUI UNC
       Returns  

Pair Trading with Buhler Industries and Uniteds

The main advantage of trading using opposite Buhler Industries and Uniteds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buhler Industries position performs unexpectedly, Uniteds 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 Uniteds will offset losses from the drop in Uniteds' long position.
The idea behind Buhler Industries and Uniteds Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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