Correlation Between Komax Holding and Basilea Pharmaceutica
Can any of the company-specific risk be diversified away by investing in both Komax Holding and Basilea Pharmaceutica 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 Basilea Pharmaceutica 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 Basilea Pharmaceutica AG, you can compare the effects of market volatilities on Komax Holding and Basilea Pharmaceutica 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 Basilea Pharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komax Holding and Basilea Pharmaceutica.
Diversification Opportunities for Komax Holding and Basilea Pharmaceutica
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Komax and Basilea is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Basilea Pharmaceutica AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basilea Pharmaceutica 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 Basilea Pharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basilea Pharmaceutica has no effect on the direction of Komax Holding i.e., Komax Holding and Basilea Pharmaceutica go up and down completely randomly.
Pair Corralation between Komax Holding and Basilea Pharmaceutica
Assuming the 90 days trading horizon Komax Holding AG is expected to generate 1.23 times more return on investment than Basilea Pharmaceutica. However, Komax Holding is 1.23 times more volatile than Basilea Pharmaceutica AG. It trades about 0.11 of its potential returns per unit of risk. Basilea Pharmaceutica AG is currently generating about -0.16 per unit of risk. If you would invest 11,020 in Komax Holding AG on September 3, 2024 and sell it today you would earn a total of 380.00 from holding Komax Holding AG or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Komax Holding AG vs. Basilea Pharmaceutica AG
Performance |
| Timeline |
| Komax Holding AG |
| Basilea Pharmaceutica |
Komax Holding and Basilea Pharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Komax Holding and Basilea Pharmaceutica
The main advantage of trading using opposite Komax Holding and Basilea Pharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komax Holding position performs unexpectedly, Basilea Pharmaceutica 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 Basilea Pharmaceutica will offset losses from the drop in Basilea Pharmaceutica's long position.| Komax Holding vs. Emmi AG | Komax Holding vs. EMS CHEMIE HOLDING AG | Komax Holding vs. Barry Callebaut AG | Komax Holding vs. Sulzer AG |
| Basilea Pharmaceutica vs. Santhera Pharmaceuticals Holding | Basilea Pharmaceutica vs. Idorsia | Basilea Pharmaceutica vs. Molecular Partners AG | Basilea Pharmaceutica vs. Evolva Holding SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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