Correlation Between Comet Holding and Implenia

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

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

Diversification Opportunities for Comet Holding and Implenia

-0.25

Correlation Coefficient

Comet Holding  Implenia

Very good diversification

The 3 months correlation between Comet and Implenia is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Comet Holding AG and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Comet 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 Comet Holding AG are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Comet Holding i.e., Comet Holding and Implenia go up and down completely randomly.

Pair Corralation between Comet Holding and Implenia

Assuming the 90 days trading horizon Comet Holding AG is expected to under-perform the Implenia. In addition to that, Comet Holding is 1.3 times more volatile than Implenia AG. It trades about -0.03 of its total potential returns per unit of risk. Implenia AG is currently generating about 0.22 per unit of volatility. If you would invest  3,006  in Implenia AG on December 30, 2024 and sell it today you would earn a total of  1,079  from holding Implenia AG or generate 35.89% return on investment over 90 days.

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

Comet Holding AG  vs.  Implenia AG

Comet Holding AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comet Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Comet Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Implenia AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comet Holding and Implenia

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

The idea behind Comet Holding AG and Implenia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.