Correlation Between Komax Holding and Sulzer AG

Can any of the company-specific risk be diversified away by investing in both Komax Holding and Sulzer 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 Komax Holding and Sulzer AG 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 Sulzer AG, you can compare the effects of market volatilities on Komax Holding and Sulzer 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 Komax Holding with a short position of Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komax Holding and Sulzer AG.

Diversification Opportunities for Komax Holding and Sulzer AG

0.87

Correlation Coefficient

Komax Holding  Sulzer AG

Very poor diversification

The 3 months correlation between Komax and Sulzer is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Komax Holding AG and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG 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 Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of Komax Holding i.e., Komax Holding and Sulzer AG go up and down completely randomly.

Pair Corralation between Komax Holding and Sulzer AG

Assuming the 90 days trading horizon Komax Holding is expected to generate 1.02 times less return on investment than Sulzer AG. In addition to that, Komax Holding is 1.57 times more volatile than Sulzer AG. It trades about 0.09 of its total potential returns per unit of risk. Sulzer AG is currently generating about 0.14 per unit of volatility. If you would invest  13,220  in Sulzer AG on April 22, 2025 and sell it today you would earn a total of  1,700  from holding Sulzer AG or generate 12.86% return on investment over 90 days.

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

Komax Holding AG  vs.  Sulzer AG

Komax Holding AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Komax Holding AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Komax Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Sulzer AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sulzer AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sulzer AG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Komax Holding and Sulzer AG

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

The idea behind Komax Holding AG and Sulzer 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.