Correlation Between Anhui Conch and Holcim
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and Holcim 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 Anhui Conch and Holcim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anhui Conch Cement and Holcim, you can compare the effects of market volatilities on Anhui Conch and Holcim 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 Anhui Conch with a short position of Holcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Holcim.
Diversification Opportunities for Anhui Conch and Holcim
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anhui and Holcim is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Holcim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim and Anhui Conch 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 Anhui Conch Cement are associated (or correlated) with Holcim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim has no effect on the direction of Anhui Conch i.e., Anhui Conch and Holcim go up and down completely randomly.
Pair Corralation between Anhui Conch and Holcim
Assuming the 90 days horizon Anhui Conch is expected to generate 2.38 times less return on investment than Holcim. In addition to that, Anhui Conch is 2.1 times more volatile than Holcim. It trades about 0.02 of its total potential returns per unit of risk. Holcim is currently generating about 0.1 per unit of volatility. If you would invest 6,204 in Holcim on August 31, 2024 and sell it today you would earn a total of 3,956 from holding Holcim or generate 63.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.38% |
| Values | Daily Returns |
Anhui Conch Cement vs. Holcim
Performance |
| Timeline |
| Anhui Conch Cement |
| Holcim |
Anhui Conch and Holcim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Holcim
The main advantage of trading using opposite Anhui Conch and Holcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Holcim 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 Holcim will offset losses from the drop in Holcim's long position.| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass Holdings |
| Holcim vs. HeidelbergCement AG ADR | Holcim vs. Anhui Conch Cement | Holcim vs. Buzzi Unicem SpA | Holcim vs. Wienerberger Baustoffindustrie |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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