Correlation Between Heidelberg Materials and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Heidelberg Materials and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Eskay Mining.
Diversification Opportunities for Heidelberg Materials and Eskay Mining
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heidelberg and Eskay is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Eskay Mining go up and down completely randomly.
Pair Corralation between Heidelberg Materials and Eskay Mining
Assuming the 90 days horizon Heidelberg Materials AG is expected to generate 0.38 times more return on investment than Eskay Mining. However, Heidelberg Materials AG is 2.66 times less risky than Eskay Mining. It trades about 0.38 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about 0.12 per unit of risk. If you would invest 11,965 in Heidelberg Materials AG on October 30, 2024 and sell it today you would earn a total of 1,540 from holding Heidelberg Materials AG or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heidelberg Materials AG vs. Eskay Mining Corp
Performance |
| Timeline |
| Heidelberg Materials |
| Eskay Mining Corp |
Heidelberg Materials and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and Eskay Mining
The main advantage of trading using opposite Heidelberg Materials and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Heidelberg Materials vs. GLG LIFE TECH | Heidelberg Materials vs. NXP Semiconductors NV | Heidelberg Materials vs. SOFI TECHNOLOGIES | Heidelberg Materials vs. Minerals Technologies |
| Eskay Mining vs. Zoom Video Communications | Eskay Mining vs. GEELY AUTOMOBILE | Eskay Mining vs. OPERA SOFTWARE | Eskay Mining vs. Coffee Holding Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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