Correlation Between BASF SE and CRH Plc
Can any of the company-specific risk be diversified away by investing in both BASF SE and CRH Plc 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 BASF SE and CRH Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE NA and CRH Plc, you can compare the effects of market volatilities on BASF SE and CRH Plc 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 BASF SE with a short position of CRH Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and CRH Plc.
Diversification Opportunities for BASF SE and CRH Plc
Pay attention - limited upside
The 3 months correlation between BASF and CRH is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE NA and CRH Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRH Plc and BASF SE 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 BASF SE NA are associated (or correlated) with CRH Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRH Plc has no effect on the direction of BASF SE i.e., BASF SE and CRH Plc go up and down completely randomly.
Pair Corralation between BASF SE and CRH Plc
If you would invest 5,852 in CRH Plc on August 31, 2024 and sell it today you would earn a total of 0.00 from holding CRH Plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
BASF SE NA vs. CRH Plc
Performance |
| Timeline |
| BASF SE NA |
| CRH Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BASF SE and CRH Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and CRH Plc
The main advantage of trading using opposite BASF SE and CRH Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, CRH Plc 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 CRH Plc will offset losses from the drop in CRH Plc's long position.| BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. BASF SE ADR | BASF SE vs. Braskem SA Class | BASF SE vs. Celanese |
| CRH Plc vs. Cementos Pacasmayo SAA | CRH Plc vs. Summit Materials | CRH Plc vs. Eagle Materials | CRH Plc vs. CRH PLC ADR |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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