Correlation Between MEDICAL FACILITIES and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Heidelberg Materials 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 MEDICAL FACILITIES and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Heidelberg Materials AG, you can compare the effects of market volatilities on MEDICAL FACILITIES and Heidelberg Materials 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 MEDICAL FACILITIES with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Heidelberg Materials.
Diversification Opportunities for MEDICAL FACILITIES and Heidelberg Materials
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEDICAL and Heidelberg is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with Heidelberg Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Materials has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Heidelberg Materials go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Heidelberg Materials
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to under-perform the Heidelberg Materials. But the stock apears to be less risky and, when comparing its historical volatility, MEDICAL FACILITIES NEW is 1.08 times less risky than Heidelberg Materials. The stock trades about -0.03 of its potential returns per unit of risk. The Heidelberg Materials AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 12,335 in Heidelberg Materials AG on October 16, 2024 and sell it today you would lose (75.00) from holding Heidelberg Materials AG or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Heidelberg Materials AG
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Heidelberg Materials |
MEDICAL FACILITIES and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Heidelberg Materials
The main advantage of trading using opposite MEDICAL FACILITIES and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, Heidelberg Materials 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 Heidelberg Materials will offset losses from the drop in Heidelberg Materials' long position.| MEDICAL FACILITIES vs. Vulcan Materials | MEDICAL FACILITIES vs. VULCAN MATERIALS | MEDICAL FACILITIES vs. GOODYEAR T RUBBER | MEDICAL FACILITIES vs. SANOK RUBBER ZY |
| Heidelberg Materials vs. SCANDMEDICAL SOLDK 040 | Heidelberg Materials vs. AECOM TECHNOLOGY | Heidelberg Materials vs. Wayside Technology Group | Heidelberg Materials vs. MEDICAL FACILITIES NEW |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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