Correlation Between Iberdrola and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both Iberdrola and Heidelberg Materials 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 Iberdrola and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iberdrola SA and Heidelberg Materials AG, you can compare the effects of market volatilities on Iberdrola and Heidelberg Materials 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 Iberdrola with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberdrola and Heidelberg Materials.
Diversification Opportunities for Iberdrola and Heidelberg Materials
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iberdrola and Heidelberg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Iberdrola SA and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and Iberdrola 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 Iberdrola SA are associated (or correlated) with Heidelberg Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Materials has no effect on the direction of Iberdrola i.e., Iberdrola and Heidelberg Materials go up and down completely randomly.
Pair Corralation between Iberdrola and Heidelberg Materials
Assuming the 90 days trading horizon Iberdrola is expected to generate 14.52 times less return on investment than Heidelberg Materials. But when comparing it to its historical volatility, Iberdrola SA is 1.08 times less risky than Heidelberg Materials. It trades about 0.02 of its potential returns per unit of risk. Heidelberg Materials AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 11,700 in Heidelberg Materials AG on September 13, 2024 and sell it today you would earn a total of 660.00 from holding Heidelberg Materials AG or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iberdrola SA vs. Heidelberg Materials AG
Performance |
| Timeline |
| Iberdrola SA |
| Heidelberg Materials |
Iberdrola and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberdrola and Heidelberg Materials
The main advantage of trading using opposite Iberdrola and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberdrola position performs unexpectedly, Heidelberg Materials 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 Heidelberg Materials will offset losses from the drop in Heidelberg Materials' long position.| Iberdrola vs. Heidelberg Materials AG | Iberdrola vs. Hyster Yale Materials Handling | Iberdrola vs. NEWELL RUBBERMAID | Iberdrola vs. Citic Telecom International |
| Heidelberg Materials vs. Vulcan Materials | Heidelberg Materials vs. Superior Plus Corp | Heidelberg Materials vs. NMI Holdings | Heidelberg Materials vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |