Correlation Between BANK HANDLOWY and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY 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 BANK HANDLOWY and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and Heidelberg Materials AG, you can compare the effects of market volatilities on BANK HANDLOWY 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 BANK HANDLOWY with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and Heidelberg Materials.
Diversification Opportunities for BANK HANDLOWY and Heidelberg Materials
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BANK and Heidelberg is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and BANK HANDLOWY 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 BANK HANDLOWY 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 BANK HANDLOWY i.e., BANK HANDLOWY and Heidelberg Materials go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and Heidelberg Materials
Assuming the 90 days trading horizon BANK HANDLOWY is expected to generate 0.21 times more return on investment than Heidelberg Materials. However, BANK HANDLOWY is 4.79 times less risky than Heidelberg Materials. It trades about 0.66 of its potential returns per unit of risk. Heidelberg Materials AG is currently generating about 0.14 per unit of risk. If you would invest 2,160 in BANK HANDLOWY on November 18, 2024 and sell it today you would earn a total of 380.00 from holding BANK HANDLOWY or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. Heidelberg Materials AG
Performance |
| Timeline |
| BANK HANDLOWY |
| Heidelberg Materials |
BANK HANDLOWY and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and Heidelberg Materials
The main advantage of trading using opposite BANK HANDLOWY and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY 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.| BANK HANDLOWY vs. PACIFIC ONLINE | BANK HANDLOWY vs. CarsalesCom | BANK HANDLOWY vs. MUTUIONLINE | BANK HANDLOWY vs. BioNTech SE |
| Heidelberg Materials vs. HYATT HOTELS A | Heidelberg Materials vs. Insteel Industries | Heidelberg Materials vs. BlueScope Steel Limited | Heidelberg Materials vs. Daido Steel Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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