Correlation Between CRH Plc and UPM-Kymmene Oyj
Can any of the company-specific risk be diversified away by investing in both CRH Plc and UPM-Kymmene Oyj 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 UPM-Kymmene Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRH Plc and UPM Kymmene Oyj, you can compare the effects of market volatilities on CRH Plc and UPM-Kymmene Oyj 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 UPM-Kymmene Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRH Plc and UPM-Kymmene Oyj.
Diversification Opportunities for CRH Plc and UPM-Kymmene Oyj
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CRH and UPM-Kymmene is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding CRH Plc and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene Oyj 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 are associated (or correlated) with UPM-Kymmene Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of CRH Plc i.e., CRH Plc and UPM-Kymmene Oyj go up and down completely randomly.
Pair Corralation between CRH Plc and UPM-Kymmene Oyj
If you would invest 5,852 in CRH Plc on August 27, 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 | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
CRH Plc vs. UPM Kymmene Oyj
Performance |
| Timeline |
| CRH Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| UPM Kymmene Oyj |
CRH Plc and UPM-Kymmene Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRH Plc and UPM-Kymmene Oyj
The main advantage of trading using opposite CRH Plc and UPM-Kymmene Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRH Plc position performs unexpectedly, UPM-Kymmene Oyj 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 UPM-Kymmene Oyj will offset losses from the drop in UPM-Kymmene Oyj's long position.| CRH Plc vs. Cementos Pacasmayo SAA | CRH Plc vs. Summit Materials | CRH Plc vs. Eagle Materials | CRH Plc vs. CRH PLC ADR |
| UPM-Kymmene Oyj vs. Mercer International | UPM-Kymmene Oyj vs. Sylvamo Corp | UPM-Kymmene Oyj vs. Suzano Papel e | UPM-Kymmene Oyj vs. Clearwater Paper |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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