Correlation Between Straumann Holding and Coloplast
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Coloplast 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 Straumann Holding and Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Coloplast A, you can compare the effects of market volatilities on Straumann Holding and Coloplast 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 Straumann Holding with a short position of Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Coloplast.
Diversification Opportunities for Straumann Holding and Coloplast
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Straumann and Coloplast is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Coloplast A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A and Straumann 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 Straumann Holding AG are associated (or correlated) with Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A has no effect on the direction of Straumann Holding i.e., Straumann Holding and Coloplast go up and down completely randomly.
Pair Corralation between Straumann Holding and Coloplast
Assuming the 90 days horizon Straumann Holding is expected to generate 1.28 times less return on investment than Coloplast. In addition to that, Straumann Holding is 2.41 times more volatile than Coloplast A. It trades about 0.02 of its total potential returns per unit of risk. Coloplast A is currently generating about 0.05 per unit of volatility. If you would invest 1,099 in Coloplast A on August 31, 2024 and sell it today you would earn a total of 190.00 from holding Coloplast A or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Straumann Holding AG vs. Coloplast A
Performance |
| Timeline |
| Straumann Holding |
| Coloplast A |
Straumann Holding and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Coloplast
The main advantage of trading using opposite Straumann Holding and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Straumann Holding AG | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA |
| Coloplast vs. Straumann Holding AG | Coloplast vs. Hoya Corp | Coloplast vs. EssilorLuxottica Socit anonyme | Coloplast vs. Essilor International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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