Correlation Between Monarch Cement and Holcim
Can any of the company-specific risk be diversified away by investing in both Monarch Cement and Holcim 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 Monarch Cement and Holcim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Monarch Cement and Holcim, you can compare the effects of market volatilities on Monarch Cement and Holcim 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 Monarch Cement with a short position of Holcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monarch Cement and Holcim.
Diversification Opportunities for Monarch Cement and Holcim
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monarch and Holcim is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Monarch Cement and Holcim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim and Monarch Cement 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 The Monarch Cement are associated (or correlated) with Holcim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim has no effect on the direction of Monarch Cement i.e., Monarch Cement and Holcim go up and down completely randomly.
Pair Corralation between Monarch Cement and Holcim
Given the investment horizon of 90 days Monarch Cement is expected to generate 1.09 times less return on investment than Holcim. In addition to that, Monarch Cement is 1.12 times more volatile than Holcim. It trades about 0.06 of its total potential returns per unit of risk. Holcim is currently generating about 0.07 per unit of volatility. If you would invest 8,750 in Holcim on August 26, 2024 and sell it today you would earn a total of 1,250 from holding Holcim or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.85% |
| Values | Daily Returns |
The Monarch Cement vs. Holcim
Performance |
| Timeline |
| Monarch Cement |
| Holcim |
Monarch Cement and Holcim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monarch Cement and Holcim
The main advantage of trading using opposite Monarch Cement and Holcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monarch Cement position performs unexpectedly, Holcim 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 Holcim will offset losses from the drop in Holcim's long position.| Monarch Cement vs. Ascendant Resources | Monarch Cement vs. Cantex Mine Development | Monarch Cement vs. Amarc Resources | Monarch Cement vs. Sterling Metals Corp |
| Holcim vs. HeidelbergCement AG ADR | Holcim vs. Anhui Conch Cement | Holcim vs. Buzzi Unicem SpA | Holcim vs. Wienerberger Baustoffindustrie |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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