Correlation Between Comet Holding and Holcim AG

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

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

Diversification Opportunities for Comet Holding and Holcim AG

0.64

Correlation Coefficient

Comet Holding  Holcim AG

Poor diversification

The 3 months correlation between Comet and Holcim is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Comet Holding AG and Holcim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim AG and Comet 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 Comet Holding AG are associated (or correlated) with Holcim AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim AG has no effect on the direction of Comet Holding i.e., Comet Holding and Holcim AG go up and down completely randomly.

Pair Corralation between Comet Holding and Holcim AG

Assuming the 90 days trading horizon Comet Holding is expected to generate 1.31 times less return on investment than Holcim AG. But when comparing it to its historical volatility, Comet Holding AG is 1.18 times less risky than Holcim AG. It trades about 0.24 of its potential returns per unit of risk. Holcim AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  4,448  in Holcim AG on April 24, 2025 and sell it today you would earn a total of  1,946  from holding Holcim AG or generate 43.75% return on investment over 90 days.

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

Comet Holding AG  vs.  Holcim AG

Comet Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Comet Holding AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Comet Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Holcim AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holcim AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Holcim AG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comet Holding and Holcim AG

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

The idea behind Comet Holding AG and Holcim AG 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 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.