Correlation Between Basilea Pharmaceutica and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Basilea Pharmaceutica and Komax 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 Basilea Pharmaceutica and Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basilea Pharmaceutica AG and Komax Holding AG, you can compare the effects of market volatilities on Basilea Pharmaceutica and Komax 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 Basilea Pharmaceutica with a short position of Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basilea Pharmaceutica and Komax Holding.
Diversification Opportunities for Basilea Pharmaceutica and Komax Holding
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Basilea and Komax is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Basilea Pharmaceutica AG and Komax Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komax Holding AG and Basilea Pharmaceutica 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 Basilea Pharmaceutica AG are associated (or correlated) with Komax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komax Holding AG has no effect on the direction of Basilea Pharmaceutica i.e., Basilea Pharmaceutica and Komax Holding go up and down completely randomly.
Pair Corralation between Basilea Pharmaceutica and Komax Holding
Assuming the 90 days trading horizon Basilea Pharmaceutica AG is expected to generate 0.54 times more return on investment than Komax Holding. However, Basilea Pharmaceutica AG is 1.87 times less risky than Komax Holding. It trades about 0.14 of its potential returns per unit of risk. Komax Holding AG is currently generating about 0.06 per unit of risk. If you would invest 4,095 in Basilea Pharmaceutica AG on December 2, 2024 and sell it today you would earn a total of 620.00 from holding Basilea Pharmaceutica AG or generate 15.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Basilea Pharmaceutica AG vs. Komax Holding AG
Performance |
Timeline |
Basilea Pharmaceutica |
Komax Holding AG |
Basilea Pharmaceutica and Komax Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basilea Pharmaceutica and Komax Holding
The main advantage of trading using opposite Basilea Pharmaceutica and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basilea Pharmaceutica position performs unexpectedly, Komax 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 Komax Holding will offset losses from the drop in Komax Holding's long position.Basilea Pharmaceutica vs. Santhera Pharmaceuticals Holding | Basilea Pharmaceutica vs. Idorsia | Basilea Pharmaceutica vs. Molecular Partners AG | Basilea Pharmaceutica vs. Evolva Holding SA |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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