Correlation Between EMS CHEMIE and Bossard Holding
Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Bossard 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 EMS CHEMIE and Bossard Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMS CHEMIE HOLDING AG and Bossard Holding AG, you can compare the effects of market volatilities on EMS CHEMIE and Bossard 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 EMS CHEMIE with a short position of Bossard Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Bossard Holding.
Diversification Opportunities for EMS CHEMIE and Bossard Holding
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EMS and Bossard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Bossard Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bossard Holding AG and EMS CHEMIE 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 EMS CHEMIE HOLDING AG are associated (or correlated) with Bossard Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bossard Holding AG has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Bossard Holding go up and down completely randomly.
Pair Corralation between EMS CHEMIE and Bossard Holding
Assuming the 90 days trading horizon EMS CHEMIE is expected to generate 1.44 times less return on investment than Bossard Holding. But when comparing it to its historical volatility, EMS CHEMIE HOLDING AG is 1.63 times less risky than Bossard Holding. It trades about 0.29 of its potential returns per unit of risk. Bossard Holding AG is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 19,100 in Bossard Holding AG on October 29, 2024 and sell it today you would earn a total of 1,300 from holding Bossard Holding AG or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMS CHEMIE HOLDING AG vs. Bossard Holding AG
Performance |
| Timeline |
| EMS CHEMIE HOLDING |
| Bossard Holding AG |
EMS CHEMIE and Bossard Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMS CHEMIE and Bossard Holding
The main advantage of trading using opposite EMS CHEMIE and Bossard Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE position performs unexpectedly, Bossard 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 Bossard Holding will offset losses from the drop in Bossard Holding's long position.| EMS CHEMIE vs. Cicor Technologies | EMS CHEMIE vs. Luzerner Kantonalbank AG | EMS CHEMIE vs. Basler Kantonalbank | EMS CHEMIE vs. Adval Tech Holding |
| Bossard Holding vs. VAT Group AG | Bossard Holding vs. Bucher Industries AG | Bossard Holding vs. EMS CHEMIE HOLDING AG | Bossard Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |