Correlation Between Implenia and Kudelski

Can any of the company-specific risk be diversified away by investing in both Implenia and Kudelski 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 Implenia and Kudelski into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Implenia AG and Kudelski, you can compare the effects of market volatilities on Implenia and Kudelski 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 Implenia with a short position of Kudelski. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Kudelski.

Diversification Opportunities for Implenia and Kudelski

0.24

Correlation Coefficient

Implenia  Kudelski

Modest diversification

The 3 months correlation between Implenia and Kudelski is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Kudelski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kudelski and Implenia 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 Implenia AG are associated (or correlated) with Kudelski. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kudelski has no effect on the direction of Implenia i.e., Implenia and Kudelski go up and down completely randomly.

Pair Corralation between Implenia and Kudelski

Assuming the 90 days trading horizon Implenia is expected to generate 10.19 times less return on investment than Kudelski. But when comparing it to its historical volatility, Implenia AG is 2.02 times less risky than Kudelski. It trades about 0.01 of its potential returns per unit of risk. Kudelski is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Kudelski on September 20, 2024 and sell it today you would earn a total of  3.00  from holding Kudelski or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Implenia AG  vs.  Kudelski

Implenia AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implenia AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Implenia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kudelski

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kudelski are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Kudelski is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Implenia and Kudelski

The main advantage of trading using opposite Implenia and Kudelski positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia position performs unexpectedly, Kudelski 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 Kudelski will offset losses from the drop in Kudelski's long position.

The idea behind Implenia AG and Kudelski pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.