Correlation Between ARDAGH METAL and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Heidelberg Materials AG, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Heidelberg Materials.
Diversification Opportunities for ARDAGH METAL and Heidelberg Materials
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARDAGH and Heidelberg is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Heidelberg Materials go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Heidelberg Materials
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Heidelberg Materials. In addition to that, ARDAGH METAL is 1.8 times more volatile than Heidelberg Materials AG. It trades about -0.14 of its total potential returns per unit of risk. Heidelberg Materials AG is currently generating about -0.01 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Heidelberg Materials AG
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Heidelberg Materials |
ARDAGH METAL and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Heidelberg Materials
The main advantage of trading using opposite ARDAGH METAL and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. PARKEN Sport Entertainment | ARDAGH METAL vs. Transport International Holdings | ARDAGH METAL vs. SPORTING | ARDAGH METAL vs. SCIENCE IN SPORT |
| Heidelberg Materials vs. Scandinavian Tobacco Group | Heidelberg Materials vs. BURLINGTON STORES | Heidelberg Materials vs. Burlington Stores | Heidelberg Materials vs. UNITED RENTALS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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