Correlation Between Komax Holding and Bachem Holding
Can any of the company-specific risk be diversified away by investing in both Komax Holding and Bachem 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 Komax Holding and Bachem Holding 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 Bachem Holding AG, you can compare the effects of market volatilities on Komax Holding and Bachem 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 Komax Holding with a short position of Bachem Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komax Holding and Bachem Holding.
Diversification Opportunities for Komax Holding and Bachem Holding
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Komax and Bachem is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Bachem Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bachem Holding 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 Bachem Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bachem Holding AG has no effect on the direction of Komax Holding i.e., Komax Holding and Bachem Holding go up and down completely randomly.
Pair Corralation between Komax Holding and Bachem Holding
Assuming the 90 days trading horizon Komax Holding AG is expected to generate 0.68 times more return on investment than Bachem Holding. However, Komax Holding AG is 1.48 times less risky than Bachem Holding. It trades about 0.12 of its potential returns per unit of risk. Bachem Holding AG is currently generating about 0.0 per unit of risk. If you would invest 10,960 in Komax Holding AG on September 1, 2024 and sell it today you would earn a total of 440.00 from holding Komax Holding AG or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Komax Holding AG vs. Bachem Holding AG
Performance |
| Timeline |
| Komax Holding AG |
| Bachem Holding AG |
Komax Holding and Bachem Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Komax Holding and Bachem Holding
The main advantage of trading using opposite Komax Holding and Bachem Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komax Holding position performs unexpectedly, Bachem 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 Bachem Holding will offset losses from the drop in Bachem Holding's long position.| Komax Holding vs. Comet Holding AG | Komax Holding vs. Bossard Holding AG | Komax Holding vs. VAT Group AG | Komax Holding vs. Bucher Industries AG |
| Bachem Holding vs. Siegfried Holding | Bachem Holding vs. VAT Group AG | Bachem Holding vs. Lonza Group AG | Bachem Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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