Correlation Between Komax Holding and Implenia

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

Diversification Opportunities for Komax Holding and Implenia

-0.03

Correlation Coefficient

Komax Holding  Implenia

Good diversification

The 3 months correlation between Komax and Implenia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Komax 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 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 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 Komax Holding i.e., Komax Holding and Implenia go up and down completely randomly.

Pair Corralation between Komax Holding and Implenia

Assuming the 90 days trading horizon Komax Holding AG is expected to under-perform the Implenia. In addition to that, Komax Holding is 1.62 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

Komax Holding AG  vs.  Implenia 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.

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 Komax Holding and Implenia

The main advantage of trading using opposite Komax Holding and Implenia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komax 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 Komax 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.