Correlation Between Helvetia Holding and Bucher Industries

Can any of the company-specific risk be diversified away by investing in both Helvetia Holding 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 Helvetia Holding and Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Helvetia Holding AG and Bucher Industries AG, you can compare the effects of market volatilities on Helvetia Holding 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 Helvetia Holding with a short position of Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Bucher Industries.

Diversification Opportunities for Helvetia Holding and Bucher Industries

-0.1

Correlation Coefficient

Helvetia Holding  Bucher Industries

Good diversification

The 3 months correlation between Helvetia and Bucher is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding 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 Helvetia Holding 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 Helvetia Holding 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 Helvetia Holding i.e., Helvetia Holding and Bucher Industries go up and down completely randomly.

Pair Corralation between Helvetia Holding and Bucher Industries

Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.85 times more return on investment than Bucher Industries. However, Helvetia Holding AG is 1.17 times less risky than Bucher Industries. It trades about 0.15 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  13,750  in Helvetia Holding AG on September 5, 2024 and sell it today you would earn a total of  1,380  from holding Helvetia Holding AG or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helvetia Holding AG  vs.  Bucher Industries AG

Helvetia Holding

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bucher Industries

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, Bucher Industries is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Helvetia Holding and Bucher Industries

The main advantage of trading using opposite Helvetia Holding and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding 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.

The idea behind Helvetia Holding AG and Bucher Industries 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.