Correlation Between Compagnie and HeidelbergCement
Can any of the company-specific risk be diversified away by investing in both Compagnie and HeidelbergCement 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 Compagnie and HeidelbergCement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and HeidelbergCement AG, you can compare the effects of market volatilities on Compagnie and HeidelbergCement 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 Compagnie with a short position of HeidelbergCement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and HeidelbergCement.
Diversification Opportunities for Compagnie and HeidelbergCement
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Compagnie and HeidelbergCement is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and HeidelbergCement AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeidelbergCement and Compagnie 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 Compagnie de Saint Gobain are associated (or correlated) with HeidelbergCement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeidelbergCement has no effect on the direction of Compagnie i.e., Compagnie and HeidelbergCement go up and down completely randomly.
Pair Corralation between Compagnie and HeidelbergCement
Assuming the 90 days horizon Compagnie is expected to generate 1.2 times less return on investment than HeidelbergCement. In addition to that, Compagnie is 1.01 times more volatile than HeidelbergCement AG. It trades about 0.12 of its total potential returns per unit of risk. HeidelbergCement AG is currently generating about 0.14 per unit of volatility. If you would invest 7,149 in HeidelbergCement AG on August 25, 2024 and sell it today you would earn a total of 4,711 from holding HeidelbergCement AG or generate 65.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. HeidelbergCement AG
Performance |
| Timeline |
| Compagnie de Saint |
| HeidelbergCement |
Compagnie and HeidelbergCement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and HeidelbergCement
The main advantage of trading using opposite Compagnie and HeidelbergCement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, HeidelbergCement 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 HeidelbergCement will offset losses from the drop in HeidelbergCement's long position.| Compagnie vs. HeidelbergCement AG | Compagnie vs. Superior Plus Corp | Compagnie vs. NMI Holdings | Compagnie vs. Origin Agritech |
| HeidelbergCement vs. Regions Financial | HeidelbergCement vs. BANKINTER ADR 2007 | HeidelbergCement vs. Chiba Bank | HeidelbergCement vs. REVO INSURANCE SPA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |