Correlation Between Heidelberg Materials and BASF SE
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and BASF SE 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 BASF SE 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 BASF SE, you can compare the effects of market volatilities on Heidelberg Materials and BASF SE 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 BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and BASF SE.
Diversification Opportunities for Heidelberg Materials and BASF SE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heidelberg and BASF is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and BASF SE go up and down completely randomly.
Pair Corralation between Heidelberg Materials and BASF SE
Assuming the 90 days horizon Heidelberg Materials AG is expected to generate 1.0 times more return on investment than BASF SE. However, Heidelberg Materials AG is 1.0 times less risky than BASF SE. It trades about 0.13 of its potential returns per unit of risk. BASF SE is currently generating about 0.03 per unit of risk. If you would invest 5,742 in Heidelberg Materials AG on November 1, 2024 and sell it today you would earn a total of 7,778 from holding Heidelberg Materials AG or generate 135.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Heidelberg Materials AG vs. BASF SE
Performance |
| Timeline |
| Heidelberg Materials |
| BASF SE |
Heidelberg Materials and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and BASF SE
The main advantage of trading using opposite Heidelberg Materials and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE'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 |
| BASF SE vs. AIR LIQUIDE ADR | BASF SE vs. Air Products and | BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. BASF SE |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |