Correlation Between VP Bank and Burckhardt Compression
Can any of the company-specific risk be diversified away by investing in both VP Bank and Burckhardt Compression 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 VP Bank and Burckhardt Compression into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VP Bank AG and Burckhardt Compression, you can compare the effects of market volatilities on VP Bank and Burckhardt Compression 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 VP Bank with a short position of Burckhardt Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of VP Bank and Burckhardt Compression.
Diversification Opportunities for VP Bank and Burckhardt Compression
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VPBN and Burckhardt is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding VP Bank AG and Burckhardt Compression in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burckhardt Compression and VP Bank 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 VP Bank AG are associated (or correlated) with Burckhardt Compression. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burckhardt Compression has no effect on the direction of VP Bank i.e., VP Bank and Burckhardt Compression go up and down completely randomly.
Pair Corralation between VP Bank and Burckhardt Compression
Assuming the 90 days trading horizon VP Bank AG is expected to under-perform the Burckhardt Compression. But the stock apears to be less risky and, when comparing its historical volatility, VP Bank AG is 1.22 times less risky than Burckhardt Compression. The stock trades about 0.0 of its potential returns per unit of risk. The Burckhardt Compression is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 51,688 in Burckhardt Compression on August 26, 2024 and sell it today you would earn a total of 14,812 from holding Burckhardt Compression or generate 28.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VP Bank AG vs. Burckhardt Compression
Performance |
| Timeline |
| VP Bank AG |
| Burckhardt Compression |
VP Bank and Burckhardt Compression Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VP Bank and Burckhardt Compression
The main advantage of trading using opposite VP Bank and Burckhardt Compression positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VP Bank position performs unexpectedly, Burckhardt Compression 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 Burckhardt Compression will offset losses from the drop in Burckhardt Compression's long position.| VP Bank vs. Swissquote Group Holding | VP Bank vs. Banque Cantonale | VP Bank vs. Barry Callebaut AG | VP Bank vs. Vontobel Holding |
| Burckhardt Compression vs. Bucher Industries AG | Burckhardt Compression vs. Sulzer AG | Burckhardt Compression vs. Comet Holding AG | Burckhardt Compression vs. Belimo Holding |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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