Correlation Between Burkhalter Holding and Cembra Money

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

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

Diversification Opportunities for Burkhalter Holding and Cembra Money

0.41

Correlation Coefficient

Burkhalter Holding  Cembra Money

Very weak diversification

The 3 months correlation between Burkhalter and Cembra is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Burkhalter Holding AG and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank and Burkhalter 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 Burkhalter Holding AG are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Burkhalter Holding i.e., Burkhalter Holding and Cembra Money go up and down completely randomly.

Pair Corralation between Burkhalter Holding and Cembra Money

Assuming the 90 days trading horizon Burkhalter Holding is expected to generate 2.47 times less return on investment than Cembra Money. But when comparing it to its historical volatility, Burkhalter Holding AG is 1.03 times less risky than Cembra Money. It trades about 0.05 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,675  in Cembra Money Bank on October 3, 2024 and sell it today you would earn a total of  525.00  from holding Cembra Money Bank or generate 6.84% return on investment over 90 days.

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

Burkhalter Holding AG  vs.  Cembra Money Bank

Burkhalter Holding

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Burkhalter Holding AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Burkhalter Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cembra Money Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cembra Money may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Burkhalter Holding and Cembra Money

The main advantage of trading using opposite Burkhalter Holding and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burkhalter Holding position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.

The idea behind Burkhalter Holding AG and Cembra Money Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.