Correlation Between Burckhardt Compression and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Burckhardt Compression 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 Burckhardt Compression and Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burckhardt Compression and Komax Holding AG, you can compare the effects of market volatilities on Burckhardt Compression 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 Burckhardt Compression with a short position of Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burckhardt Compression and Komax Holding.
Diversification Opportunities for Burckhardt Compression and Komax Holding
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Burckhardt and Komax is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Burckhardt Compression 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 Burckhardt Compression 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 Burckhardt Compression 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 Burckhardt Compression i.e., Burckhardt Compression and Komax Holding go up and down completely randomly.
Pair Corralation between Burckhardt Compression and Komax Holding
Assuming the 90 days trading horizon Burckhardt Compression is expected to generate 0.65 times more return on investment than Komax Holding. However, Burckhardt Compression is 1.53 times less risky than Komax Holding. It trades about 0.09 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 52,229 in Burckhardt Compression on November 1, 2024 and sell it today you would earn a total of 16,771 from holding Burckhardt Compression or generate 32.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.56% |
| Values | Daily Returns |
Burckhardt Compression vs. Komax Holding AG
Performance |
| Timeline |
| Burckhardt Compression |
| Komax Holding AG |
Burckhardt Compression and Komax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burckhardt Compression and Komax Holding
The main advantage of trading using opposite Burckhardt Compression and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burckhardt Compression 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.| Burckhardt Compression vs. Bucher Industries AG | Burckhardt Compression vs. Sulzer AG | Burckhardt Compression vs. Comet Holding AG | Burckhardt Compression vs. Belimo Holding |
| Komax Holding vs. Comet Holding AG | Komax Holding vs. Bossard Holding AG | Komax Holding vs. VAT Group AG | Komax Holding vs. Bucher Industries AG |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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