Correlation Between Bucher Industries and Feintool International

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

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

Diversification Opportunities for Bucher Industries and Feintool International

-0.43

Correlation Coefficient

Bucher Industries  Feintool International

Very good diversification

The 3 months correlation between Bucher and Feintool is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Feintool International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feintool International and Bucher Industries 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 Bucher Industries AG are associated (or correlated) with Feintool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feintool International has no effect on the direction of Bucher Industries i.e., Bucher Industries and Feintool International go up and down completely randomly.

Pair Corralation between Bucher Industries and Feintool International

Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 0.43 times more return on investment than Feintool International. However, Bucher Industries AG is 2.31 times less risky than Feintool International. It trades about 0.19 of its potential returns per unit of risk. Feintool International Holding is currently generating about -0.08 per unit of risk. If you would invest  34,450  in Bucher Industries AG on December 4, 2024 and sell it today you would earn a total of  5,000  from holding Bucher Industries AG or generate 14.51% return on investment over 90 days.

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

Bucher Industries AG  vs.  Feintool International Holding

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 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bucher Industries showed solid returns over the last few months and may actually be approaching a breakup point.

Feintool International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Feintool International Holding 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.

Pair Trading with Bucher Industries and Feintool International

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

The idea behind Bucher Industries AG and Feintool International Holding 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.