Correlation Between Sulzer AG and Bucher Industries
Can any of the company-specific risk be diversified away by investing in both Sulzer AG 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 Sulzer AG and Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and Bucher Industries AG, you can compare the effects of market volatilities on Sulzer AG 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 Sulzer AG with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Bucher Industries.
Diversification Opportunities for Sulzer AG and Bucher Industries
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sulzer and Bucher is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer 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 Sulzer AG 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 Sulzer 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 Sulzer AG i.e., Sulzer AG and Bucher Industries go up and down completely randomly.
Pair Corralation between Sulzer AG and Bucher Industries
Assuming the 90 days trading horizon Sulzer AG is expected to generate 1.34 times more return on investment than Bucher Industries. However, Sulzer AG is 1.34 times more volatile than Bucher Industries AG. It trades about 0.08 of its potential returns per unit of risk. Bucher Industries AG is currently generating about -0.01 per unit of risk. If you would invest 10,948 in Sulzer AG on November 7, 2024 and sell it today you would earn a total of 3,232 from holding Sulzer AG or generate 29.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sulzer AG vs. Bucher Industries AG
Performance |
| Timeline |
| Sulzer AG |
| Bucher Industries |
Sulzer AG and Bucher Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sulzer AG and Bucher Industries
The main advantage of trading using opposite Sulzer AG and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG 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.| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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