Correlation Between Bucher Industries and LandisGyr Group

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Can any of the company-specific risk be diversified away by investing in both Bucher Industries and LandisGyr Group 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 LandisGyr Group 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 LandisGyr Group AG, you can compare the effects of market volatilities on Bucher Industries and LandisGyr Group 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 LandisGyr Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and LandisGyr Group.

Diversification Opportunities for Bucher Industries and LandisGyr Group

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bucher and LandisGyr is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and LandisGyr Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandisGyr Group AG 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 LandisGyr Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandisGyr Group AG has no effect on the direction of Bucher Industries i.e., Bucher Industries and LandisGyr Group go up and down completely randomly.

Pair Corralation between Bucher Industries and LandisGyr Group

Assuming the 90 days trading horizon Bucher Industries AG is expected to under-perform the LandisGyr Group. But the stock apears to be less risky and, when comparing its historical volatility, Bucher Industries AG is 1.29 times less risky than LandisGyr Group. The stock trades about -0.01 of its potential returns per unit of risk. The LandisGyr Group AG is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6,145  in LandisGyr Group AG on September 20, 2024 and sell it today you would lose (585.00) from holding LandisGyr Group AG or give up 9.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Bucher Industries AG  vs.  LandisGyr Group AG

 Performance 
       Timeline  
Bucher Industries 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Bucher Industries AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
LandisGyr Group AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LandisGyr Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bucher Industries and LandisGyr Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bucher Industries and LandisGyr Group

The main advantage of trading using opposite Bucher Industries and LandisGyr Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, LandisGyr Group 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 LandisGyr Group will offset losses from the drop in LandisGyr Group's long position.
The idea behind Bucher Industries AG and LandisGyr Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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