Correlation Between Partners Group and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Partners Group and Bachem 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 Partners Group and Bachem Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partners Group Holding and Bachem Holding AG, you can compare the effects of market volatilities on Partners Group and Bachem 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 Partners Group with a short position of Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Group and Bachem Holding.
Diversification Opportunities for Partners Group and Bachem Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Partners and Bachem is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Partners Group Holding and Bachem Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bachem Holding AG and Partners Group 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 Partners Group Holding are associated (or correlated) with Bachem Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bachem Holding AG has no effect on the direction of Partners Group i.e., Partners Group and Bachem Holding go up and down completely randomly.
Pair Corralation between Partners Group and Bachem Holding
Assuming the 90 days trading horizon Partners Group Holding is expected to generate 0.78 times more return on investment than Bachem Holding. However, Partners Group Holding is 1.28 times less risky than Bachem Holding. It trades about 0.14 of its potential returns per unit of risk. Bachem Holding AG is currently generating about -0.13 per unit of risk. If you would invest 133,000 in Partners Group Holding on November 10, 2024 and sell it today you would earn a total of 5,600 from holding Partners Group Holding or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Partners Group Holding vs. Bachem Holding AG
Performance |
| Timeline |
| Partners Group Holding |
| Bachem Holding AG |
Partners Group and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partners Group and Bachem Holding
The main advantage of trading using opposite Partners Group and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Group position performs unexpectedly, Bachem 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 Bachem Holding will offset losses from the drop in Bachem Holding's long position.| Partners Group vs. Sika AG | Partners Group vs. Swiss Life Holding | Partners Group vs. Givaudan SA | Partners Group vs. Lonza Group AG |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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