Correlation Between Implenia and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both Implenia 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 Implenia and Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Implenia AG and Bucher Industries AG, you can compare the effects of market volatilities on Implenia 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 Implenia with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Bucher Industries.
Diversification Opportunities for Implenia and Bucher Industries
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Implenia and Bucher is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Implenia 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 Implenia 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 Implenia 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 Implenia i.e., Implenia and Bucher Industries go up and down completely randomly.
Pair Corralation between Implenia and Bucher Industries
Assuming the 90 days trading horizon Implenia AG is expected to under-perform the Bucher Industries. In addition to that, Implenia is 1.59 times more volatile than Bucher Industries AG. It trades about -0.12 of its total potential returns per unit of risk. Bucher Industries AG is currently generating about 0.06 per unit of volatility. If you would invest 33,650 in Bucher Industries AG on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Bucher Industries AG or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Implenia AG vs. Bucher Industries AG
Performance |
| Timeline |
| Implenia AG |
| Bucher Industries |
Implenia and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Implenia and Bucher Industries
The main advantage of trading using opposite Implenia and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia 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.| Implenia vs. Helvetia Holding AG | Implenia vs. Bucher Industries AG | Implenia vs. Hubersuhner AG | Implenia vs. Stadler Rail AG |
| Bucher Industries vs. OC Oerlikon Corp | Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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