Correlation Between Lafargeholcim and Buzzi Unicem
Can any of the company-specific risk be diversified away by investing in both Lafargeholcim and Buzzi Unicem 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 Lafargeholcim and Buzzi Unicem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lafargeholcim Ltd ADR and Buzzi Unicem SpA, you can compare the effects of market volatilities on Lafargeholcim and Buzzi Unicem 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 Lafargeholcim with a short position of Buzzi Unicem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lafargeholcim and Buzzi Unicem.
Diversification Opportunities for Lafargeholcim and Buzzi Unicem
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lafargeholcim and Buzzi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lafargeholcim Ltd ADR and Buzzi Unicem SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buzzi Unicem SpA and Lafargeholcim 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 Lafargeholcim Ltd ADR are associated (or correlated) with Buzzi Unicem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buzzi Unicem SpA has no effect on the direction of Lafargeholcim i.e., Lafargeholcim and Buzzi Unicem go up and down completely randomly.
Pair Corralation between Lafargeholcim and Buzzi Unicem
Assuming the 90 days horizon Lafargeholcim Ltd ADR is expected to generate 0.64 times more return on investment than Buzzi Unicem. However, Lafargeholcim Ltd ADR is 1.57 times less risky than Buzzi Unicem. It trades about 0.06 of its potential returns per unit of risk. Buzzi Unicem SpA is currently generating about 0.03 per unit of risk. If you would invest 1,892 in Lafargeholcim Ltd ADR on November 2, 2024 and sell it today you would earn a total of 135.00 from holding Lafargeholcim Ltd ADR or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lafargeholcim Ltd ADR vs. Buzzi Unicem SpA
Performance |
| Timeline |
| Lafargeholcim ADR |
| Buzzi Unicem SpA |
Lafargeholcim and Buzzi Unicem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lafargeholcim and Buzzi Unicem
The main advantage of trading using opposite Lafargeholcim and Buzzi Unicem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lafargeholcim position performs unexpectedly, Buzzi Unicem 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 Buzzi Unicem will offset losses from the drop in Buzzi Unicem's long position.| Lafargeholcim vs. Anhui Conch Cement | Lafargeholcim vs. Buzzi Unicem SpA | Lafargeholcim vs. Wienerberger Baustoffindustrie | Lafargeholcim vs. China National Building |
| Buzzi Unicem vs. China National Building | Buzzi Unicem vs. Anhui Conch Cement | Buzzi Unicem vs. Lafargeholcim Ltd ADR | Buzzi Unicem vs. HeidelbergCement AG ADR |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |