Correlation Between EMS CHEMIE and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both EMS CHEMIE and Bucher Industries 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 Bucher Industries 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 Bucher Industries AG, you can compare the effects of market volatilities on EMS CHEMIE and Bucher Industries 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 Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMS CHEMIE and Bucher Industries.
Diversification Opportunities for EMS CHEMIE and Bucher Industries
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMS and Bucher is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding EMS CHEMIE HOLDING AG and Bucher Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucher Industries 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 Bucher Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bucher Industries has no effect on the direction of EMS CHEMIE i.e., EMS CHEMIE and Bucher Industries go up and down completely randomly.
Pair Corralation between EMS CHEMIE and Bucher Industries
Assuming the 90 days trading horizon EMS CHEMIE HOLDING AG is expected to generate 0.98 times more return on investment than Bucher Industries. However, EMS CHEMIE HOLDING AG is 1.02 times less risky than Bucher Industries. It trades about 0.0 of its potential returns per unit of risk. Bucher Industries AG is currently generating about 0.0 per unit of risk. If you would invest 65,842 in EMS CHEMIE HOLDING AG on August 25, 2024 and sell it today you would lose (1,892) from holding EMS CHEMIE HOLDING AG or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMS CHEMIE HOLDING AG vs. Bucher Industries AG
Performance |
| Timeline |
| EMS CHEMIE HOLDING |
| Bucher Industries |
EMS CHEMIE and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMS CHEMIE and Bucher Industries
The main advantage of trading using opposite EMS CHEMIE and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMS CHEMIE position performs unexpectedly, Bucher Industries 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 Bucher Industries will offset losses from the drop in Bucher Industries' long position.| EMS CHEMIE vs. St Galler Kantonalbank | EMS CHEMIE vs. VP Bank AG | EMS CHEMIE vs. Metall Zug AG | EMS CHEMIE vs. mobilezone ag |
| Bucher Industries vs. Emmi AG | Bucher Industries vs. EMS CHEMIE HOLDING AG | Bucher Industries vs. Barry Callebaut AG | Bucher Industries vs. Sulzer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |