Correlation Between James Hardie and Buzzi Unicem
Can any of the company-specific risk be diversified away by investing in both James Hardie and Buzzi Unicem 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 James Hardie and Buzzi Unicem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Hardie Industries and Buzzi Unicem SpA, you can compare the effects of market volatilities on James Hardie and Buzzi Unicem 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 James Hardie with a short position of Buzzi Unicem. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Hardie and Buzzi Unicem.
Diversification Opportunities for James Hardie and Buzzi Unicem
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Buzzi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding James Hardie Industries and Buzzi Unicem SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buzzi Unicem SpA and James Hardie 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 James Hardie Industries are associated (or correlated) with Buzzi Unicem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buzzi Unicem SpA has no effect on the direction of James Hardie i.e., James Hardie and Buzzi Unicem go up and down completely randomly.
Pair Corralation between James Hardie and Buzzi Unicem
Considering the 90-day investment horizon James Hardie Industries is expected to under-perform the Buzzi Unicem. In addition to that, James Hardie is 1.47 times more volatile than Buzzi Unicem SpA. It trades about -0.01 of its total potential returns per unit of risk. Buzzi Unicem SpA is currently generating about 0.06 per unit of volatility. If you would invest 1,685 in Buzzi Unicem SpA on November 3, 2024 and sell it today you would earn a total of 365.00 from holding Buzzi Unicem SpA or generate 21.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.18% |
| Values | Daily Returns |
James Hardie Industries vs. Buzzi Unicem SpA
Performance |
| Timeline |
| James Hardie Industries |
| Buzzi Unicem SpA |
James Hardie and Buzzi Unicem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Hardie and Buzzi Unicem
The main advantage of trading using opposite James Hardie and Buzzi Unicem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Hardie position performs unexpectedly, Buzzi Unicem 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 Buzzi Unicem will offset losses from the drop in Buzzi Unicem's long position.| James Hardie vs. Loma Negra Compania | James Hardie vs. Summit Materials | James Hardie vs. United States Lime | James Hardie vs. Eagle Materials |
| Buzzi Unicem vs. China National Building | Buzzi Unicem vs. Anhui Conch Cement | Buzzi Unicem vs. Lafargeholcim Ltd ADR | Buzzi Unicem vs. HeidelbergCement AG ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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