Correlation Between Heidelberg Materials and Media
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on Heidelberg Materials and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Media.
Diversification Opportunities for Heidelberg Materials and Media
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heidelberg and Media is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Media go up and down completely randomly.
Pair Corralation between Heidelberg Materials and Media
Assuming the 90 days horizon Heidelberg Materials AG is expected to generate 0.39 times more return on investment than Media. However, Heidelberg Materials AG is 2.57 times less risky than Media. It trades about 0.36 of its potential returns per unit of risk. Media and Games is currently generating about 0.05 per unit of risk. If you would invest 12,010 in Heidelberg Materials AG on November 3, 2024 and sell it today you would earn a total of 1,640 from holding Heidelberg Materials AG or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heidelberg Materials AG vs. Media and Games
Performance |
| Timeline |
| Heidelberg Materials |
| Media and Games |
Heidelberg Materials and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and Media
The main advantage of trading using opposite Heidelberg Materials and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Heidelberg Materials vs. Compagnie de Saint Gobain | Heidelberg Materials vs. Vulcan Materials | Heidelberg Materials vs. Martin Marietta Materials |
| Media vs. ARDAGH METAL PACDL 0001 | Media vs. PKSHA TECHNOLOGY INC | Media vs. Air Transport Services | Media vs. Take Two Interactive Software |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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