Correlation Between Bossard Holding and OC Oerlikon

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Can any of the company-specific risk be diversified away by investing in both Bossard Holding and OC Oerlikon 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 Bossard Holding and OC Oerlikon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bossard Holding AG and OC Oerlikon Corp, you can compare the effects of market volatilities on Bossard Holding and OC Oerlikon 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 Bossard Holding with a short position of OC Oerlikon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bossard Holding and OC Oerlikon.

Diversification Opportunities for Bossard Holding and OC Oerlikon

0.86
  Correlation Coefficient

Very poor diversification

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

Pair Corralation between Bossard Holding and OC Oerlikon

Assuming the 90 days trading horizon Bossard Holding AG is expected to generate 0.83 times more return on investment than OC Oerlikon. However, Bossard Holding AG is 1.2 times less risky than OC Oerlikon. It trades about 0.0 of its potential returns per unit of risk. OC Oerlikon Corp is currently generating about -0.04 per unit of risk. If you would invest  20,853  in Bossard Holding AG on September 30, 2024 and sell it today you would lose (1,593) from holding Bossard Holding AG or give up 7.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.37%
ValuesDaily Returns

Bossard Holding AG  vs.  OC Oerlikon Corp

 Performance 
       Timeline  
Bossard Holding AG 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Bossard Holding 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
OC Oerlikon Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OC Oerlikon Corp 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bossard Holding and OC Oerlikon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bossard Holding and OC Oerlikon

The main advantage of trading using opposite Bossard Holding and OC Oerlikon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bossard Holding position performs unexpectedly, OC Oerlikon 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 OC Oerlikon will offset losses from the drop in OC Oerlikon's long position.
The idea behind Bossard Holding AG and OC Oerlikon Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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