Correlation Between Heidelberg Materials and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Heidelberg Materials and Anhui Conch 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 Anhui Conch 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 Anhui Conch Cement, you can compare the effects of market volatilities on Heidelberg Materials and Anhui Conch 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 Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Anhui Conch.
Diversification Opportunities for Heidelberg Materials and Anhui Conch
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heidelberg and Anhui is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement 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 Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Anhui Conch go up and down completely randomly.
Pair Corralation between Heidelberg Materials and Anhui Conch
Assuming the 90 days trading horizon Heidelberg Materials AG is expected to generate 0.58 times more return on investment than Anhui Conch. However, Heidelberg Materials AG is 1.74 times less risky than Anhui Conch. It trades about 0.03 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about -0.08 per unit of risk. If you would invest 11,960 in Heidelberg Materials AG on September 25, 2024 and sell it today you would earn a total of 75.00 from holding Heidelberg Materials AG or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heidelberg Materials AG vs. Anhui Conch Cement
Performance |
| Timeline |
| Heidelberg Materials |
| Anhui Conch Cement |
Heidelberg Materials and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heidelberg Materials and Anhui Conch
The main advantage of trading using opposite Heidelberg Materials and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidelberg Materials position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Heidelberg Materials vs. Daikin IndustriesLtd | Heidelberg Materials vs. Vulcan Materials | Heidelberg Materials vs. Anhui Conch Cement | Heidelberg Materials vs. Martin Marietta Materials |
| Anhui Conch vs. Daikin IndustriesLtd | Anhui Conch vs. Vulcan Materials | Anhui Conch vs. Martin Marietta Materials | Anhui Conch vs. Heidelberg Materials 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 Stocks Directory module to find actively traded stocks across global markets.
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