Correlation Between Holcim and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Holcim and Anhui Conch 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 Holcim and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holcim and Anhui Conch Cement, you can compare the effects of market volatilities on Holcim and Anhui Conch 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 Holcim with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim and Anhui Conch.
Diversification Opportunities for Holcim and Anhui Conch
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Holcim and Anhui is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Holcim and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and Holcim 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 Holcim are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Holcim i.e., Holcim and Anhui Conch go up and down completely randomly.
Pair Corralation between Holcim and Anhui Conch
Assuming the 90 days horizon Holcim is expected to generate 0.48 times more return on investment than Anhui Conch. However, Holcim is 2.1 times less risky than Anhui Conch. It trades about 0.1 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.02 per unit of risk. If you would invest 6,204 in Holcim on August 31, 2024 and sell it today you would earn a total of 3,956 from holding Holcim or generate 63.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.38% |
| Values | Daily Returns |
Holcim vs. Anhui Conch Cement
Performance |
| Timeline |
| Holcim |
| Anhui Conch Cement |
Holcim and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holcim and Anhui Conch
The main advantage of trading using opposite Holcim and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Holcim vs. HeidelbergCement AG ADR | Holcim vs. Anhui Conch Cement | Holcim vs. Buzzi Unicem SpA | Holcim vs. Wienerberger Baustoffindustrie |
| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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