Correlation Between Barry Callebaut and Bucher Industries

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

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

Diversification Opportunities for Barry Callebaut and Bucher Industries

-0.52

Correlation Coefficient

Barry Callebaut  Bucher Industries

Excellent diversification

The 3 months correlation between Barry and Bucher is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut 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 Barry Callebaut 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 Barry Callebaut 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 Barry Callebaut i.e., Barry Callebaut and Bucher Industries go up and down completely randomly.

Pair Corralation between Barry Callebaut and Bucher Industries

Assuming the 90 days trading horizon Barry Callebaut AG is expected to under-perform the Bucher Industries. In addition to that, Barry Callebaut is 1.54 times more volatile than Bucher Industries AG. It trades about -0.16 of its total potential returns per unit of risk. Bucher Industries AG is currently generating about 0.17 per unit of volatility. If you would invest  34,200  in Bucher Industries AG on December 2, 2024 and sell it today you would earn a total of  4,150  from holding Bucher Industries AG or generate 12.13% return on investment over 90 days.

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

Barry Callebaut AG  vs.  Bucher Industries AG

Barry Callebaut AG

Risk-Adjusted Performance

Very Weak

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

Bucher Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bucher Industries AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bucher Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Barry Callebaut and Bucher Industries

The main advantage of trading using opposite Barry Callebaut and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut 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 Barry Callebaut 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.