Correlation Between Komax Holding and Comet Holding

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

Diversification Opportunities for Komax Holding and Comet Holding

0.69

Correlation Coefficient

Komax Holding  Comet Holding

Poor diversification

The 3 months correlation between Komax and Comet is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Comet Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comet 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 Comet Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comet Holding AG has no effect on the direction of Komax Holding i.e., Komax Holding and Comet Holding go up and down completely randomly.

Pair Corralation between Komax Holding and Comet Holding

Assuming the 90 days trading horizon Komax Holding AG is expected to under-perform the Comet Holding. In addition to that, Komax Holding is 1.24 times more volatile than Comet Holding AG. It trades about -0.03 of its total potential returns per unit of risk. Comet Holding AG is currently generating about -0.03 per unit of volatility. If you would invest  24,850  in Comet Holding AG on December 30, 2024 and sell it today you would lose (1,950) from holding Comet Holding AG or give up 7.85% of portfolio value over 90 days.

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

Komax Holding AG  vs.  Comet Holding AG

Komax Holding AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Komax Holding AG 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.

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.

Pair Trading with Komax Holding and Comet Holding

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

The idea behind Komax Holding AG and Comet 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.