Correlation Between Heidelberg Materials and Maire Tecnimont
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and Maire Tecnimont 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 Maire Tecnimont 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 Maire Tecnimont SpA, you can compare the effects of market volatilities on Heidelberg Materials and Maire Tecnimont 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 Maire Tecnimont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Maire Tecnimont.
Diversification Opportunities for Heidelberg Materials and Maire Tecnimont
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heidelberg and Maire is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Maire Tecnimont SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maire Tecnimont SpA 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 Maire Tecnimont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maire Tecnimont SpA has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Maire Tecnimont go up and down completely randomly.
Pair Corralation between Heidelberg Materials and Maire Tecnimont
Assuming the 90 days horizon Heidelberg Materials is expected to generate 1.67 times less return on investment than Maire Tecnimont. But when comparing it to its historical volatility, Heidelberg Materials AG is 1.56 times less risky than Maire Tecnimont. It trades about 0.27 of its potential returns per unit of risk. Maire Tecnimont SpA is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Maire Tecnimont SpA on September 13, 2024 and sell it today you would earn a total of 70.00 from holding Maire Tecnimont SpA or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Heidelberg Materials AG vs. Maire Tecnimont SpA
Performance |
| Timeline |
| Heidelberg Materials |
| Maire Tecnimont SpA |
Heidelberg Materials and Maire Tecnimont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and Maire Tecnimont
The main advantage of trading using opposite Heidelberg Materials and Maire Tecnimont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, Maire Tecnimont 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 Maire Tecnimont will offset losses from the drop in Maire Tecnimont's long position.| Heidelberg Materials vs. Superior Plus Corp | Heidelberg Materials vs. NMI Holdings | Heidelberg Materials vs. SIVERS SEMICONDUCTORS AB | Heidelberg Materials vs. NorAm Drilling AS |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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