Correlation Between Limbach Holdings and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Limbach Holdings and Bilfinger 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 Limbach Holdings and Bilfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limbach Holdings and Bilfinger SE ADR, you can compare the effects of market volatilities on Limbach Holdings and Bilfinger 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 Limbach Holdings with a short position of Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limbach Holdings and Bilfinger.
Diversification Opportunities for Limbach Holdings and Bilfinger
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Limbach and Bilfinger is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Limbach Holdings and Bilfinger SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE ADR and Limbach Holdings 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 Limbach Holdings are associated (or correlated) with Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE ADR has no effect on the direction of Limbach Holdings i.e., Limbach Holdings and Bilfinger go up and down completely randomly.
Pair Corralation between Limbach Holdings and Bilfinger
Considering the 90-day investment horizon Limbach Holdings is expected to generate 1.49 times more return on investment than Bilfinger. However, Limbach Holdings is 1.49 times more volatile than Bilfinger SE ADR. It trades about 0.1 of its potential returns per unit of risk. Bilfinger SE ADR is currently generating about 0.04 per unit of risk. If you would invest 4,481 in Limbach Holdings on November 5, 2024 and sell it today you would earn a total of 4,767 from holding Limbach Holdings or generate 106.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.24% |
| Values | Daily Returns |
Limbach Holdings vs. Bilfinger SE ADR
Performance |
| Timeline |
| Limbach Holdings |
| Bilfinger SE ADR |
Limbach Holdings and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limbach Holdings and Bilfinger
The main advantage of trading using opposite Limbach Holdings and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limbach Holdings position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
| Bilfinger vs. JGC Corp | Bilfinger vs. ACS Actividades De | Bilfinger vs. MYR Group | Bilfinger vs. Limbach Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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