Correlation Between Heidelberg Materials and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and WAGNERS HOLDING 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 Heidelberg Materials and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heidelberg Materials AG and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on Heidelberg Materials and WAGNERS HOLDING 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 Heidelberg Materials with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and WAGNERS HOLDING.
Diversification Opportunities for Heidelberg Materials and WAGNERS HOLDING
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heidelberg and WAGNERS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and Heidelberg Materials 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 Heidelberg Materials AG are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between Heidelberg Materials and WAGNERS HOLDING
Assuming the 90 days horizon Heidelberg Materials is expected to generate 1.07 times less return on investment than WAGNERS HOLDING. But when comparing it to its historical volatility, Heidelberg Materials AG is 2.64 times less risky than WAGNERS HOLDING. It trades about 0.11 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 48.00 in WAGNERS HOLDING LTD on September 26, 2024 and sell it today you would earn a total of 34.00 from holding WAGNERS HOLDING LTD or generate 70.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heidelberg Materials AG vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| Heidelberg Materials |
| WAGNERS HOLDING LTD |
Heidelberg Materials and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and WAGNERS HOLDING
The main advantage of trading using opposite Heidelberg Materials and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| Heidelberg Materials vs. Daikin IndustriesLtd | Heidelberg Materials vs. Vulcan Materials | Heidelberg Materials vs. Anhui Conch Cement | Heidelberg Materials vs. Martin Marietta Materials |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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