Correlation Between Comet Holding and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both Comet Holding and Sulzer AG 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 Sulzer AG 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 Sulzer AG, you can compare the effects of market volatilities on Comet Holding and Sulzer AG 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 Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comet Holding and Sulzer AG.
Diversification Opportunities for Comet Holding and Sulzer AG
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comet and Sulzer is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Comet Holding AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG 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 Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Comet Holding i.e., Comet Holding and Sulzer AG go up and down completely randomly.
Pair Corralation between Comet Holding and Sulzer AG
Assuming the 90 days trading horizon Comet Holding AG is expected to under-perform the Sulzer AG. In addition to that, Comet Holding is 1.32 times more volatile than Sulzer AG. It trades about -0.2 of its total potential returns per unit of risk. Sulzer AG is currently generating about -0.15 per unit of volatility. If you would invest 13,400 in Sulzer AG on August 25, 2024 and sell it today you would lose (620.00) from holding Sulzer AG or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comet Holding AG vs. Sulzer AG
Performance |
| Timeline |
| Comet Holding AG |
| Sulzer AG |
Comet Holding and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comet Holding and Sulzer AG
The main advantage of trading using opposite Comet Holding and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comet Holding position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG'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 |
| Sulzer AG vs. OC Oerlikon Corp | Sulzer AG vs. Helvetia Holding AG | Sulzer AG vs. Swiss Life Holding | Sulzer AG vs. VAT Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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