Correlation Between Inficon Holding and Bucher Industries

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

Diversification Opportunities for Inficon Holding and Bucher Industries

0.94

Correlation Coefficient

Inficon Holding  Bucher Industries

Almost no diversification

The 3 months correlation between Inficon and Bucher is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Inficon Holding and Bucher Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucher Industries and Inficon 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 Inficon Holding 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 Inficon Holding i.e., Inficon Holding and Bucher Industries go up and down completely randomly.

Pair Corralation between Inficon Holding and Bucher Industries

Assuming the 90 days trading horizon Inficon Holding is expected to under-perform the Bucher Industries. In addition to that, Inficon Holding is 1.25 times more volatile than Bucher Industries AG. It trades about -0.17 of its total potential returns per unit of risk. Bucher Industries AG is currently generating about 0.02 per unit of volatility. If you would invest  33,150  in Bucher Industries AG on September 15, 2024 and sell it today you would earn a total of  100.00  from holding Bucher Industries AG or generate 0.3% return on investment over 90 days.

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

Inficon Holding  vs.  Bucher Industries AG

Inficon Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inficon Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Bucher Industries

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite Inficon Holding and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inficon 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 Inficon Holding 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.