Correlation Between Straumann Holding and Comet Holding
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Comet 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 Straumann Holding and Comet Holding 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 Comet Holding AG, you can compare the effects of market volatilities on Straumann Holding and Comet 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 Straumann Holding with a short position of Comet Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Comet Holding.
Diversification Opportunities for Straumann Holding and Comet Holding
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Straumann and Comet is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Comet Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comet Holding AG 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 Comet Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comet Holding AG has no effect on the direction of Straumann Holding i.e., Straumann Holding and Comet Holding go up and down completely randomly.
Pair Corralation between Straumann Holding and Comet Holding
Assuming the 90 days trading horizon Straumann Holding AG is expected to generate 0.96 times more return on investment than Comet Holding. However, Straumann Holding AG is 1.04 times less risky than Comet Holding. It trades about -0.06 of its potential returns per unit of risk. Comet Holding AG is currently generating about -0.14 per unit of risk. If you would invest 11,775 in Straumann Holding AG on September 4, 2024 and sell it today you would lose (300.00) from holding Straumann Holding AG or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Straumann Holding AG vs. Comet Holding AG
Performance |
| Timeline |
| Straumann Holding |
| Comet Holding AG |
Straumann Holding and Comet Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Comet Holding
The main advantage of trading using opposite Straumann Holding and Comet Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Comet 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 Comet Holding will offset losses from the drop in Comet Holding's long position.| Straumann Holding vs. Novartis AG | Straumann Holding vs. Givaudan SA | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. ABB |
| Comet Holding vs. VAT Group AG | Comet Holding vs. Bachem Holding AG | Comet Holding vs. Inficon Holding | Comet Holding vs. Tecan 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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