Correlation Between Bank Central and Holcim
Can any of the company-specific risk be diversified away by investing in both Bank Central 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 Bank Central and Holcim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Holcim, you can compare the effects of market volatilities on Bank Central 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 Bank Central with a short position of Holcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Holcim.
Diversification Opportunities for Bank Central and Holcim
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Holcim is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Holcim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim and Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and Holcim go up and down completely randomly.
Pair Corralation between Bank Central and Holcim
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Holcim. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.0 times less risky than Holcim. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Holcim is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,803 in Holcim on August 30, 2024 and sell it today you would earn a total of 357.00 from holding Holcim or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Holcim
Performance |
| Timeline |
| Bank Central Asia |
| Holcim |
Bank Central and Holcim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Holcim
The main advantage of trading using opposite Bank Central and Holcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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