Correlation Between CRH PLC and Loma Negra
Can any of the company-specific risk be diversified away by investing in both CRH PLC and Loma Negra 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 CRH PLC and Loma Negra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRH PLC ADR and Loma Negra Compania, you can compare the effects of market volatilities on CRH PLC and Loma Negra 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 CRH PLC with a short position of Loma Negra. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRH PLC and Loma Negra.
Diversification Opportunities for CRH PLC and Loma Negra
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CRH and Loma is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CRH PLC ADR and Loma Negra Compania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loma Negra Compania and CRH PLC 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 CRH PLC ADR are associated (or correlated) with Loma Negra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loma Negra Compania has no effect on the direction of CRH PLC i.e., CRH PLC and Loma Negra go up and down completely randomly.
Pair Corralation between CRH PLC and Loma Negra
Considering the 90-day investment horizon CRH PLC is expected to generate 2.34 times less return on investment than Loma Negra. But when comparing it to its historical volatility, CRH PLC ADR is 1.46 times less risky than Loma Negra. It trades about 0.07 of its potential returns per unit of risk. Loma Negra Compania is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Loma Negra Compania on August 27, 2024 and sell it today you would earn a total of 391.00 from holding Loma Negra Compania or generate 59.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRH PLC ADR vs. Loma Negra Compania
Performance |
| Timeline |
| CRH PLC ADR |
| Loma Negra Compania |
CRH PLC and Loma Negra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRH PLC and Loma Negra
The main advantage of trading using opposite CRH PLC and Loma Negra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRH PLC position performs unexpectedly, Loma Negra 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 Loma Negra will offset losses from the drop in Loma Negra's long position.| CRH PLC vs. Holcim | CRH PLC vs. Lafargeholcim Ltd ADR | CRH PLC vs. Eagle Materials | CRH PLC vs. The Monarch Cement |
| Loma Negra vs. Holcim | Loma Negra vs. Lafargeholcim Ltd ADR | Loma Negra vs. Eagle Materials | Loma Negra vs. The Monarch Cement |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |