Correlation Between Carnegie Clean and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean 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 Carnegie Clean and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and Heidelberg Materials AG, you can compare the effects of market volatilities on Carnegie Clean 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 Carnegie Clean with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Heidelberg Materials.
Diversification Opportunities for Carnegie Clean and Heidelberg Materials
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnegie and Heidelberg is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and Carnegie Clean 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 Carnegie Clean Energy 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 Carnegie Clean i.e., Carnegie Clean and Heidelberg Materials go up and down completely randomly.
Pair Corralation between Carnegie Clean and Heidelberg Materials
Assuming the 90 days trading horizon Carnegie Clean is expected to generate 4.01 times less return on investment than Heidelberg Materials. In addition to that, Carnegie Clean is 3.29 times more volatile than Heidelberg Materials AG. It trades about 0.03 of its total potential returns per unit of risk. Heidelberg Materials AG is currently generating about 0.35 per unit of volatility. If you would invest 12,060 in Heidelberg Materials AG on October 25, 2024 and sell it today you would earn a total of 1,295 from holding Heidelberg Materials AG or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Heidelberg Materials AG
Performance |
| Timeline |
| Carnegie Clean Energy |
| Heidelberg Materials |
Carnegie Clean and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Heidelberg Materials
The main advantage of trading using opposite Carnegie Clean and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.| Carnegie Clean vs. CARSALESCOM | Carnegie Clean vs. YATRA ONLINE DL 0001 | Carnegie Clean vs. Lamar Advertising | Carnegie Clean vs. Tencent Music Entertainment |
| Heidelberg Materials vs. MidCap Financial Investment | Heidelberg Materials vs. RYU Apparel | Heidelberg Materials vs. REINET INVESTMENTS SCA | Heidelberg Materials vs. Carnegie Clean Energy |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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