Correlation Between Helvetia Holding and Bucher Industries

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

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

Diversification Opportunities for Helvetia Holding and Bucher Industries

0.81

Correlation Coefficient

Helvetia Holding  Bucher Industries

Very poor diversification

The 3 months correlation between Helvetia and Bucher is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Bucher Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucher Industries and Helvetia 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 Helvetia Holding AG are associated (or correlated) with Bucher Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bucher Industries has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Bucher Industries go up and down completely randomly.

Pair Corralation between Helvetia Holding and Bucher Industries

Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.6 times more return on investment than Bucher Industries. However, Helvetia Holding AG is 1.66 times less risky than Bucher Industries. It trades about 0.39 of its potential returns per unit of risk. Bucher Industries AG is currently generating about 0.17 per unit of risk. If you would invest  14,940  in Helvetia Holding AG on December 30, 2024 and sell it today you would earn a total of  3,470  from holding Helvetia Holding AG or generate 23.23% return on investment over 90 days.

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

Helvetia Holding AG  vs.  Bucher Industries AG

Helvetia Holding

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Helvetia Holding and Bucher Industries

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

The idea behind Helvetia Holding AG and Bucher Industries 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.