Correlation Between VAT Group and Bossard Holding
Can any of the company-specific risk be diversified away by investing in both VAT Group and Bossard 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 VAT Group and Bossard Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VAT Group AG and Bossard Holding AG, you can compare the effects of market volatilities on VAT Group and Bossard 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 VAT Group with a short position of Bossard Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and Bossard Holding.
Diversification Opportunities for VAT Group and Bossard Holding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VAT and Bossard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Bossard Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bossard Holding AG and VAT 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 VAT Group AG are associated (or correlated) with Bossard Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bossard Holding AG has no effect on the direction of VAT Group i.e., VAT Group and Bossard Holding go up and down completely randomly.
Pair Corralation between VAT Group and Bossard Holding
Assuming the 90 days trading horizon VAT Group is expected to generate 9.75 times less return on investment than Bossard Holding. In addition to that, VAT Group is 1.55 times more volatile than Bossard Holding AG. It trades about 0.02 of its total potential returns per unit of risk. Bossard Holding AG is currently generating about 0.26 per unit of volatility. If you would invest 19,100 in Bossard Holding AG on October 29, 2024 and sell it today you would earn a total of 1,300 from holding Bossard Holding AG or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VAT Group AG vs. Bossard Holding AG
Performance |
| Timeline |
| VAT Group AG |
| Bossard Holding AG |
VAT Group and Bossard Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VAT Group and Bossard Holding
The main advantage of trading using opposite VAT Group and Bossard Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAT Group position performs unexpectedly, Bossard 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 Bossard Holding will offset losses from the drop in Bossard Holding's long position.| VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group Holding |
| Bossard Holding vs. VAT Group AG | Bossard Holding vs. Bucher Industries AG | Bossard Holding vs. EMS CHEMIE HOLDING AG | Bossard Holding vs. Komax Holding 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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