Correlation Between Bachem Holding and SIG Combibloc
Can any of the company-specific risk be diversified away by investing in both Bachem Holding and SIG Combibloc 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 Bachem Holding and SIG Combibloc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bachem Holding AG and SIG Combibloc Group, you can compare the effects of market volatilities on Bachem Holding and SIG Combibloc 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 Bachem Holding with a short position of SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bachem Holding and SIG Combibloc.
Diversification Opportunities for Bachem Holding and SIG Combibloc
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bachem and SIG is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bachem Holding AG and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group and Bachem 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 Bachem Holding AG are associated (or correlated) with SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Bachem Holding i.e., Bachem Holding and SIG Combibloc go up and down completely randomly.
Pair Corralation between Bachem Holding and SIG Combibloc
Assuming the 90 days trading horizon Bachem Holding AG is expected to under-perform the SIG Combibloc. But the stock apears to be less risky and, when comparing its historical volatility, Bachem Holding AG is 1.22 times less risky than SIG Combibloc. The stock trades about -0.14 of its potential returns per unit of risk. The SIG Combibloc Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,739 in SIG Combibloc Group on December 2, 2024 and sell it today you would earn a total of 51.00 from holding SIG Combibloc Group or generate 2.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bachem Holding AG vs. SIG Combibloc Group
Performance |
Timeline |
Bachem Holding AG |
SIG Combibloc Group |
Bachem Holding and SIG Combibloc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bachem Holding and SIG Combibloc
The main advantage of trading using opposite Bachem Holding and SIG Combibloc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bachem Holding position performs unexpectedly, SIG Combibloc 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 SIG Combibloc will offset losses from the drop in SIG Combibloc's long position.Bachem Holding vs. Siegfried Holding | Bachem Holding vs. VAT Group AG | Bachem Holding vs. Lonza Group AG | Bachem Holding vs. Straumann Holding AG |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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