Correlation Between Bucher Industries and SGS SA

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

Diversification Opportunities for Bucher Industries and SGS SA

0.84

Correlation Coefficient

Bucher Industries  SGS SA

Very poor diversification

The 3 months correlation between Bucher and SGS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Bucher Industries i.e., Bucher Industries and SGS SA go up and down completely randomly.

Pair Corralation between Bucher Industries and SGS SA

Assuming the 90 days trading horizon Bucher Industries AG is expected to generate 1.18 times more return on investment than SGS SA. However, Bucher Industries is 1.18 times more volatile than SGS SA. It trades about 0.27 of its potential returns per unit of risk. SGS SA is currently generating about 0.14 per unit of risk. If you would invest  33,200  in Bucher Industries AG on April 22, 2025 and sell it today you would earn a total of  7,250  from holding Bucher Industries AG or generate 21.84% return on investment over 90 days.

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

Bucher Industries AG  vs.  SGS SA

Bucher Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bucher Industries AG are ranked lower than 21 (%) 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.

SGS SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SGS SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SGS SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bucher Industries and SGS SA

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

The idea behind Bucher Industries AG and SGS SA 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 CEOs Directory module to screen CEOs from public companies around the world.