Correlation Between Heartland Financial and CSL
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and CSL 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 Heartland Financial and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and CSL Limited, you can compare the effects of market volatilities on Heartland Financial and CSL 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 Heartland Financial with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and CSL.
Diversification Opportunities for Heartland Financial and CSL
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heartland and CSL is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and Heartland Financial 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 Heartland Financial USA are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Heartland Financial i.e., Heartland Financial and CSL go up and down completely randomly.
Pair Corralation between Heartland Financial and CSL
Assuming the 90 days horizon Heartland Financial USA is expected to generate 1.82 times more return on investment than CSL. However, Heartland Financial is 1.82 times more volatile than CSL Limited. It trades about 0.05 of its potential returns per unit of risk. CSL Limited is currently generating about 0.0 per unit of risk. If you would invest 4,160 in Heartland Financial USA on September 1, 2024 and sell it today you would earn a total of 2,190 from holding Heartland Financial USA or generate 52.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. CSL Limited
Performance |
| Timeline |
| Heartland Financial USA |
| CSL Limited |
Heartland Financial and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and CSL
The main advantage of trading using opposite Heartland Financial and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Heartland Financial vs. UNICREDIT SPA ADR | Heartland Financial vs. Deutsche Bank Aktiengesellschaft | Heartland Financial vs. Superior Plus Corp | Heartland Financial vs. Origin Agritech |
| CSL vs. ADRIATIC METALS LS 013355 | CSL vs. PT Bank Maybank | CSL vs. Heartland Financial USA | CSL vs. Regions Financial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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