Correlation Between Bucher Industries and Feintool International
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and Feintool International 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 Bucher Industries and Feintool International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bucher Industries AG and Feintool International Holding, you can compare the effects of market volatilities on Bucher Industries and Feintool International 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 Bucher Industries with a short position of Feintool International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and Feintool International.
Diversification Opportunities for Bucher Industries and Feintool International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bucher and Feintool is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Feintool International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feintool International and Bucher Industries 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 Bucher Industries AG are associated (or correlated) with Feintool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feintool International has no effect on the direction of Bucher Industries i.e., Bucher Industries and Feintool International go up and down completely randomly.
Pair Corralation between Bucher Industries and Feintool International
Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 0.64 times more return on investment than Feintool International. However, Bucher Industries AG is 1.56 times less risky than Feintool International. It trades about -0.04 of its potential returns per unit of risk. Feintool International Holding is currently generating about -0.16 per unit of risk. If you would invest 34,950 in Bucher Industries AG on September 12, 2024 and sell it today you would lose (1,250) from holding Bucher Industries AG or give up 3.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Bucher Industries AG vs. Feintool International Holding
Performance |
Timeline |
Bucher Industries |
Feintool International |
Bucher Industries and Feintool International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bucher Industries and Feintool International
The main advantage of trading using opposite Bucher Industries and Feintool International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, Feintool International 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 Feintool International will offset losses from the drop in Feintool International's long position.Bucher Industries vs. Sulzer AG | Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. Adecco Group AG |
Feintool International vs. Sulzer AG | Feintool International vs. Helvetia Holding AG | Feintool International vs. Swiss Life Holding | Feintool International vs. Adecco 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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