Correlation Between Rieter Holding and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Rieter Holding 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 Rieter Holding and Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rieter Holding AG and Komax Holding AG, you can compare the effects of market volatilities on Rieter Holding 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 Rieter Holding with a short position of Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rieter Holding and Komax Holding.
Diversification Opportunities for Rieter Holding and Komax Holding
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rieter and Komax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Rieter Holding AG 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 Rieter 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 Rieter Holding AG 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 Rieter Holding i.e., Rieter Holding and Komax Holding go up and down completely randomly.
Pair Corralation between Rieter Holding and Komax Holding
Assuming the 90 days trading horizon Rieter Holding is expected to generate 4.91 times less return on investment than Komax Holding. But when comparing it to its historical volatility, Rieter Holding AG is 1.67 times less risky than Komax Holding. It trades about 0.06 of its potential returns per unit of risk. Komax Holding AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,560 in Komax Holding AG on November 1, 2024 and sell it today you would earn a total of 1,800 from holding Komax Holding AG or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Rieter Holding AG vs. Komax Holding AG
Performance |
| Timeline |
| Rieter Holding AG |
| Komax Holding AG |
Rieter Holding and Komax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rieter Holding and Komax Holding
The main advantage of trading using opposite Rieter Holding and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rieter Holding 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.| Rieter Holding vs. Nestl SA | Rieter Holding vs. Roche Holding AG | Rieter Holding vs. Roche Holding AG | Rieter Holding vs. Procimmo Real Estate |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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