Correlation Between Comet Holding and Idorsia
Can any of the company-specific risk be diversified away by investing in both Comet Holding and Idorsia 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 Comet Holding and Idorsia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comet Holding AG and Idorsia, you can compare the effects of market volatilities on Comet Holding and Idorsia 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 Comet Holding with a short position of Idorsia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comet Holding and Idorsia.
Diversification Opportunities for Comet Holding and Idorsia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comet and Idorsia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Comet Holding AG and Idorsia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idorsia and Comet 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 Comet Holding AG are associated (or correlated) with Idorsia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idorsia has no effect on the direction of Comet Holding i.e., Comet Holding and Idorsia go up and down completely randomly.
Pair Corralation between Comet Holding and Idorsia
Assuming the 90 days trading horizon Comet Holding AG is expected to generate 0.37 times more return on investment than Idorsia. However, Comet Holding AG is 2.68 times less risky than Idorsia. It trades about 0.04 of its potential returns per unit of risk. Idorsia is currently generating about -0.07 per unit of risk. If you would invest 20,250 in Comet Holding AG on September 3, 2024 and sell it today you would earn a total of 7,700 from holding Comet Holding AG or generate 38.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comet Holding AG vs. Idorsia
Performance |
| Timeline |
| Comet Holding AG |
| Idorsia |
Comet Holding and Idorsia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comet Holding and Idorsia
The main advantage of trading using opposite Comet Holding and Idorsia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comet Holding position performs unexpectedly, Idorsia 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 Idorsia will offset losses from the drop in Idorsia's long position.| Comet Holding vs. VAT Group AG | Comet Holding vs. Bachem Holding AG | Comet Holding vs. Inficon Holding | Comet Holding vs. Tecan Group AG |
| Idorsia vs. VAT Group AG | Idorsia vs. Lonza Group AG | Idorsia vs. Basilea Pharmaceutica AG | Idorsia vs. Straumann Holding 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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