Correlation Between Cromwell Property and Holcim
Can any of the company-specific risk be diversified away by investing in both Cromwell Property 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 Cromwell Property and Holcim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and Holcim, you can compare the effects of market volatilities on Cromwell Property 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 Cromwell Property with a short position of Holcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Holcim.
Diversification Opportunities for Cromwell Property and Holcim
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cromwell and Holcim is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Holcim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim and Cromwell Property 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 Cromwell Property Group 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 Cromwell Property i.e., Cromwell Property and Holcim go up and down completely randomly.
Pair Corralation between Cromwell Property and Holcim
Assuming the 90 days horizon Cromwell Property Group is expected to under-perform the Holcim. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cromwell Property Group is 1.04 times less risky than Holcim. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Holcim is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,456 in Holcim on October 25, 2024 and sell it today you would earn a total of 4,319 from holding Holcim or generate 79.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.04% |
| Values | Daily Returns |
Cromwell Property Group vs. Holcim
Performance |
| Timeline |
| Cromwell Property |
| Holcim |
Cromwell Property and Holcim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Holcim
The main advantage of trading using opposite Cromwell Property and Holcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property 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.| Cromwell Property vs. NioCorp Developments Ltd | Cromwell Property vs. Merit Medical Systems | Cromwell Property vs. Videolocity International | Cromwell Property vs. Warner Music Group |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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