Correlation Between Sulzer AG and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Sulzer AG 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 Sulzer AG and Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sulzer AG and Komax Holding AG, you can compare the effects of market volatilities on Sulzer AG 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 Sulzer AG with a short position of Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Komax Holding.
Diversification Opportunities for Sulzer AG and Komax Holding
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sulzer and Komax is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer 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 Sulzer AG 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 Sulzer 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 Sulzer AG i.e., Sulzer AG and Komax Holding go up and down completely randomly.
Pair Corralation between Sulzer AG and Komax Holding
Assuming the 90 days trading horizon Sulzer AG is expected to under-perform the Komax Holding. But the stock apears to be less risky and, when comparing its historical volatility, Sulzer AG is 1.2 times less risky than Komax Holding. The stock trades about -0.19 of its potential returns per unit of risk. The Komax Holding AG is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 11,460 in Komax Holding AG on August 29, 2024 and sell it today you would lose (420.00) from holding Komax Holding AG or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sulzer AG vs. Komax Holding AG
Performance |
| Timeline |
| Sulzer AG |
| Komax Holding AG |
Sulzer AG and Komax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sulzer AG and Komax Holding
The main advantage of trading using opposite Sulzer AG and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG 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.| Sulzer AG vs. Bucher Industries AG | Sulzer AG vs. Comet Holding AG | Sulzer AG vs. Belimo Holding | Sulzer AG vs. Komax Holding AG |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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