Correlation Between OC Oerlikon and Komax Holding

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

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

Diversification Opportunities for OC Oerlikon and Komax Holding

-0.04

Correlation Coefficient

OC Oerlikon  Komax Holding

Good diversification

The 3 months correlation between OERL and Komax is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding OC Oerlikon Corp 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 OC Oerlikon 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 OC Oerlikon Corp 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 OC Oerlikon i.e., OC Oerlikon and Komax Holding go up and down completely randomly.

Pair Corralation between OC Oerlikon and Komax Holding

Assuming the 90 days trading horizon OC Oerlikon Corp is expected to generate 0.51 times more return on investment than Komax Holding. However, OC Oerlikon Corp is 1.94 times less risky than Komax Holding. It trades about 0.16 of its potential returns per unit of risk. Komax Holding AG is currently generating about -0.03 per unit of risk. If you would invest  351.00  in OC Oerlikon Corp on December 29, 2024 and sell it today you would earn a total of  72.00  from holding OC Oerlikon Corp or generate 20.51% return on investment over 90 days.

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

OC Oerlikon Corp  vs.  Komax Holding AG

OC Oerlikon Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OC Oerlikon Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, OC Oerlikon showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with OC Oerlikon and Komax Holding

The main advantage of trading using opposite OC Oerlikon and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OC Oerlikon 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.

The idea behind OC Oerlikon Corp and Komax 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.