Correlation Between SFS Group and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both SFS Group 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 SFS Group and Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFS Group AG and Bucher Industries AG, you can compare the effects of market volatilities on SFS Group 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 SFS Group with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFS Group and Bucher Industries.
Diversification Opportunities for SFS Group and Bucher Industries
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SFS and Bucher is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SFS Group 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 SFS 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 SFS Group 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 SFS Group i.e., SFS Group and Bucher Industries go up and down completely randomly.
Pair Corralation between SFS Group and Bucher Industries
Assuming the 90 days trading horizon SFS Group AG is expected to generate 1.07 times more return on investment than Bucher Industries. However, SFS Group is 1.07 times more volatile than Bucher Industries AG. It trades about 0.06 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 8,726 in SFS Group AG on August 27, 2024 and sell it today you would earn a total of 3,734 from holding SFS Group AG or generate 42.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFS Group AG vs. Bucher Industries AG
Performance |
| Timeline |
| SFS Group AG |
| Bucher Industries |
SFS Group and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFS Group and Bucher Industries
The main advantage of trading using opposite SFS Group and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFS Group 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.| SFS Group vs. VAT Group AG | SFS Group vs. Bucher Industries AG | SFS Group vs. Comet Holding AG | SFS Group vs. Daetwyl I |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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