Correlation Between Komax Holding and Bossard Holding

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

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

Diversification Opportunities for Komax Holding and Bossard Holding

0.71

Correlation Coefficient

Komax Holding  Bossard Holding

Poor diversification

The 3 months correlation between Komax and Bossard is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Bossard Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bossard Holding AG and Komax 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 Komax Holding AG are associated (or correlated) with Bossard Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bossard Holding AG has no effect on the direction of Komax Holding i.e., Komax Holding and Bossard Holding go up and down completely randomly.

Pair Corralation between Komax Holding and Bossard Holding

Assuming the 90 days trading horizon Komax Holding AG is expected to generate 2.27 times more return on investment than Bossard Holding. However, Komax Holding is 2.27 times more volatile than Bossard Holding AG. It trades about 0.06 of its potential returns per unit of risk. Bossard Holding AG is currently generating about 0.03 per unit of risk. If you would invest  11,500  in Komax Holding AG on December 1, 2024 and sell it today you would earn a total of  940.00  from holding Komax Holding AG or generate 8.17% return on investment over 90 days.

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

Komax Holding AG  vs.  Bossard Holding AG

Komax Holding AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Komax Holding AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Komax Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bossard Holding AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bossard Holding AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Bossard Holding 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 Komax Holding and Bossard Holding

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

The idea behind Komax Holding AG and Bossard Holding 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.