Correlation Between Holcim AG and Comet Holding

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

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

Diversification Opportunities for Holcim AG and Comet Holding

0.95

Correlation Coefficient

Holcim AG  Comet Holding

Almost no diversification

The 3 months correlation between Holcim and Comet is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Holcim 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 Holcim 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 Holcim 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 Holcim AG i.e., Holcim AG and Comet Holding go up and down completely randomly.

Pair Corralation between Holcim AG and Comet Holding

Assuming the 90 days trading horizon Holcim AG is expected to generate 1.17 times more return on investment than Comet Holding. However, Holcim AG is 1.17 times more volatile than Comet Holding AG. It trades about 0.27 of its potential returns per unit of risk. Comet Holding AG is currently generating about 0.24 per unit of risk. 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	Very Strong
Accuracy	98.39%
Values	Daily Returns

Holcim AG  vs.  Comet Holding AG

Holcim AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holcim AG are ranked lower than 20 (%) 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.

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.

Pair Trading with Holcim AG and Comet Holding

The main advantage of trading using opposite Holcim AG and Comet Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim AG 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.

The idea behind Holcim AG and Comet Holding 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.