Correlation Between Komax Holding and Cicor Technologies

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

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

Diversification Opportunities for Komax Holding and Cicor Technologies

-0.39

Correlation Coefficient

Komax Holding  Cicor Technologies

Very good diversification

The 3 months correlation between Komax and Cicor is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Cicor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicor Technologies and Komax 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 Komax Holding AG are associated (or correlated) with Cicor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicor Technologies has no effect on the direction of Komax Holding i.e., Komax Holding and Cicor Technologies go up and down completely randomly.

Pair Corralation between Komax Holding and Cicor Technologies

Assuming the 90 days trading horizon Komax Holding AG is expected to under-perform the Cicor Technologies. In addition to that, Komax Holding is 1.11 times more volatile than Cicor Technologies. It trades about -0.03 of its total potential returns per unit of risk. Cicor Technologies is currently generating about 0.08 per unit of volatility. If you would invest  5,260  in Cicor Technologies on September 20, 2024 and sell it today you would earn a total of  360.00  from holding Cicor Technologies or generate 6.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Komax Holding AG  vs.  Cicor Technologies

Komax Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cicor Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cicor Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cicor Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Komax Holding and Cicor Technologies

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

The idea behind Komax Holding AG and Cicor Technologies 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.