Correlation Between Heidelberg Materials and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and Heartland Financial 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 Heartland Financial 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 Heartland Financial USA, you can compare the effects of market volatilities on Heidelberg Materials and Heartland Financial 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Heartland Financial.
Diversification Opportunities for Heidelberg Materials and Heartland Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heidelberg and Heartland is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Heartland Financial go up and down completely randomly.
Pair Corralation between Heidelberg Materials and Heartland Financial
Assuming the 90 days horizon Heidelberg Materials is expected to generate 1.43 times less return on investment than Heartland Financial. But when comparing it to its historical volatility, Heidelberg Materials AG is 1.57 times less risky than Heartland Financial. It trades about 0.16 of its potential returns per unit of risk. Heartland Financial USA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,740 in Heartland Financial USA on September 14, 2024 and sell it today you would earn a total of 3,560 from holding Heartland Financial USA or generate 129.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.64% |
| Values | Daily Returns |
Heidelberg Materials AG vs. Heartland Financial USA
Performance |
| Timeline |
| Heidelberg Materials |
| Heartland Financial USA |
Heidelberg Materials and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and Heartland Financial
The main advantage of trading using opposite Heidelberg Materials and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, Heartland Financial 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.| Heidelberg Materials vs. Solstad Offshore ASA | Heidelberg Materials vs. MCEWEN MINING INC | Heidelberg Materials vs. DISTRICT METALS | Heidelberg Materials vs. ADRIATIC METALS LS 013355 |
| Heartland Financial vs. EAGLE MATERIALS | Heartland Financial vs. Heidelberg Materials AG | Heartland Financial vs. Compagnie Plastic Omnium | Heartland Financial vs. Mitsubishi Materials |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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