Correlation Between Heidelberg Materials and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and BANKINTER ADR 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 BANKINTER ADR 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 BANKINTER ADR 2007, you can compare the effects of market volatilities on Heidelberg Materials and BANKINTER ADR 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 BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and BANKINTER ADR.
Diversification Opportunities for Heidelberg Materials and BANKINTER ADR
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heidelberg and BANKINTER is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 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 BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and BANKINTER ADR go up and down completely randomly.
Pair Corralation between Heidelberg Materials and BANKINTER ADR
Assuming the 90 days horizon Heidelberg Materials AG is expected to generate 1.1 times more return on investment than BANKINTER ADR. However, Heidelberg Materials is 1.1 times more volatile than BANKINTER ADR 2007. It trades about 0.36 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.31 per unit of risk. If you would invest 12,010 in Heidelberg Materials AG on November 1, 2024 and sell it today you would earn a total of 1,510 from holding Heidelberg Materials AG or generate 12.57% 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. BANKINTER ADR 2007
Performance |
| Timeline |
| Heidelberg Materials |
| BANKINTER ADR 2007 |
Heidelberg Materials and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and BANKINTER ADR
The main advantage of trading using opposite Heidelberg Materials and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, BANKINTER ADR 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 BANKINTER ADR will offset losses from the drop in BANKINTER ADR's long position.| Heidelberg Materials vs. Quaker Chemical | Heidelberg Materials vs. Eurasia Mining Plc | Heidelberg Materials vs. SEKISUI CHEMICAL | Heidelberg Materials vs. Monument Mining Limited |
| BANKINTER ADR vs. GOODYEAR T RUBBER | BANKINTER ADR vs. Heidelberg Materials AG | BANKINTER ADR vs. InterContinental Hotels Group | BANKINTER ADR vs. MHP Hotel AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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