Correlation Between HeidelbergCement and Wienerberger Baustoffindustri
Can any of the company-specific risk be diversified away by investing in both HeidelbergCement 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 HeidelbergCement and Wienerberger Baustoffindustri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HeidelbergCement AG ADR and Wienerberger Baustoffindustrie, you can compare the effects of market volatilities on HeidelbergCement 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 HeidelbergCement with a short position of Wienerberger Baustoffindustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeidelbergCement and Wienerberger Baustoffindustri.
Diversification Opportunities for HeidelbergCement and Wienerberger Baustoffindustri
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HeidelbergCement and Wienerberger is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding HeidelbergCement AG ADR and Wienerberger Baustoffindustrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wienerberger Baustoffindustri and HeidelbergCement 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 HeidelbergCement AG ADR 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 HeidelbergCement i.e., HeidelbergCement and Wienerberger Baustoffindustri go up and down completely randomly.
Pair Corralation between HeidelbergCement and Wienerberger Baustoffindustri
Assuming the 90 days horizon HeidelbergCement AG ADR is expected to generate 0.55 times more return on investment than Wienerberger Baustoffindustri. However, HeidelbergCement AG ADR is 1.8 times less risky than Wienerberger Baustoffindustri. It trades about 0.32 of its potential returns per unit of risk. Wienerberger Baustoffindustrie is currently generating about -0.02 per unit of risk. If you would invest 2,175 in HeidelbergCement AG ADR on August 30, 2024 and sell it today you would earn a total of 312.00 from holding HeidelbergCement AG ADR or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeidelbergCement AG ADR vs. Wienerberger Baustoffindustrie
Performance |
| Timeline |
| HeidelbergCement AG ADR |
| Wienerberger Baustoffindustri |
HeidelbergCement and Wienerberger Baustoffindustri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeidelbergCement and Wienerberger Baustoffindustri
The main advantage of trading using opposite HeidelbergCement and Wienerberger Baustoffindustri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeidelbergCement 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.| HeidelbergCement vs. Xinyi Glass Holdings | HeidelbergCement vs. CEMATRIX | HeidelbergCement vs. CEMEX SAB de | HeidelbergCement vs. China National Building |
| Wienerberger Baustoffindustri vs. Xinyi Glass Holdings | Wienerberger Baustoffindustri vs. CEMATRIX | Wienerberger Baustoffindustri vs. CEMEX SAB de | Wienerberger Baustoffindustri vs. China National Building |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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