Correlation Between Interroll Holding and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both Interroll Holding 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 Interroll Holding and Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interroll Holding AG and Bucher Industries AG, you can compare the effects of market volatilities on Interroll Holding 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 Interroll Holding with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interroll Holding and Bucher Industries.
Diversification Opportunities for Interroll Holding and Bucher Industries
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interroll and Bucher is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Interroll 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 Interroll Holding 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 Interroll 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 Interroll Holding i.e., Interroll Holding and Bucher Industries go up and down completely randomly.
Pair Corralation between Interroll Holding and Bucher Industries
Assuming the 90 days trading horizon Interroll Holding AG is expected to under-perform the Bucher Industries. In addition to that, Interroll Holding is 1.47 times more volatile than Bucher Industries AG. It trades about -0.24 of its total potential returns per unit of risk. Bucher Industries AG is currently generating about -0.21 per unit of volatility. If you would invest 35,500 in Bucher Industries AG on August 29, 2024 and sell it today you would lose (1,900) from holding Bucher Industries AG or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interroll Holding AG vs. Bucher Industries AG
Performance |
| Timeline |
| Interroll Holding |
| Bucher Industries |
Interroll Holding and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interroll Holding and Bucher Industries
The main advantage of trading using opposite Interroll Holding and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interroll Holding 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.| Interroll Holding vs. Helvetia Holding AG | Interroll Holding vs. Swiss Life Holding | Interroll Holding vs. VAT Group AG |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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