Correlation Between Burkhalter Holding and Implenia

Can any of the company-specific risk be diversified away by investing in both Burkhalter Holding and Implenia 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 Implenia 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 Implenia AG, you can compare the effects of market volatilities on Burkhalter Holding and Implenia 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 Implenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burkhalter Holding and Implenia.

Diversification Opportunities for Burkhalter Holding and Implenia

0.19

Correlation Coefficient

Burkhalter Holding  Implenia

Average diversification

The 3 months correlation between Burkhalter and Implenia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Burkhalter Holding AG and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG 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 Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Burkhalter Holding i.e., Burkhalter Holding and Implenia go up and down completely randomly.

Pair Corralation between Burkhalter Holding and Implenia

Assuming the 90 days trading horizon Burkhalter Holding AG is expected to under-perform the Implenia. But the stock apears to be less risky and, when comparing its historical volatility, Burkhalter Holding AG is 1.3 times less risky than Implenia. The stock trades about -0.01 of its potential returns per unit of risk. The Implenia AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,015  in Implenia AG on October 3, 2024 and sell it today you would earn a total of  55.00  from holding Implenia AG or generate 1.82% return on investment over 90 days.

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

Burkhalter Holding AG  vs.  Implenia AG

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.

Implenia AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implenia AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Implenia 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 Burkhalter Holding and Implenia

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

The idea behind Burkhalter Holding AG and Implenia 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.