Correlation Between Holcim and Wienerberger Baustoffindustri
Can any of the company-specific risk be diversified away by investing in both Holcim and Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holcim and Wienerberger Baustoffindustrie, you can compare the effects of market volatilities on Holcim and Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim and Wienerberger Baustoffindustri.
Diversification Opportunities for Holcim and Wienerberger Baustoffindustri
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Holcim and Wienerberger is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Holcim and Wienerberger Baustoffindustrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wienerberger Baustoffindustri has no effect on the direction of Holcim i.e., Holcim and Wienerberger Baustoffindustri go up and down completely randomly.
Pair Corralation between Holcim and Wienerberger Baustoffindustri
Assuming the 90 days horizon Holcim is expected to generate 0.71 times more return on investment than Wienerberger Baustoffindustri. However, Holcim is 1.4 times less risky than Wienerberger Baustoffindustri. It trades about 0.07 of its potential returns per unit of risk. Wienerberger Baustoffindustrie is currently generating about 0.01 per unit of risk. If you would invest 5,456 in Holcim on October 25, 2024 and sell it today you would earn a total of 4,319 from holding Holcim or generate 79.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.96% |
| Values | Daily Returns |
Holcim vs. Wienerberger Baustoffindustrie
Performance |
| Timeline |
| Holcim |
| Wienerberger Baustoffindustri |
Holcim and Wienerberger Baustoffindustri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holcim and Wienerberger Baustoffindustri
The main advantage of trading using opposite Holcim and Wienerberger Baustoffindustri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim position performs unexpectedly, Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri will offset losses from the drop in Wienerberger Baustoffindustri's long position.| Holcim vs. HeidelbergCement AG ADR | Holcim vs. Anhui Conch Cement | Holcim vs. Buzzi Unicem SpA | Holcim vs. Wienerberger Baustoffindustrie |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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