Correlation Between Bucher Industries and Interroll Holding

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

Diversification Opportunities for Bucher Industries and Interroll Holding

0.63

Correlation Coefficient

Bucher Industries  Interroll Holding

Poor diversification

The 3 months correlation between Bucher and Interroll is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and Interroll Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interroll Holding 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 Interroll Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interroll Holding has no effect on the direction of Bucher Industries i.e., Bucher Industries and Interroll Holding go up and down completely randomly.

Pair Corralation between Bucher Industries and Interroll Holding

Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 0.7 times more return on investment than Interroll Holding. However, Bucher Industries AG is 1.42 times less risky than Interroll Holding. It trades about 0.17 of its potential returns per unit of risk. Interroll Holding AG is currently generating about 0.07 per unit of risk. If you would invest  32,600  in Bucher Industries AG on December 30, 2024 and sell it today you would earn a total of  5,050  from holding Bucher Industries AG or generate 15.49% return on investment over 90 days.

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

Bucher Industries AG  vs.  Interroll Holding AG

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 showed solid returns over the last few months and may actually be approaching a breakup point.

Interroll Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interroll Holding AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Interroll Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bucher Industries and Interroll Holding

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

The idea behind Bucher Industries AG and Interroll Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.