Correlation Between CHEMICAL INDUSTRIES and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES and Heidelberg Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and Heidelberg Materials AG, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES with a short position of Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and Heidelberg Materials.
Diversification Opportunities for CHEMICAL INDUSTRIES and Heidelberg Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEMICAL and Heidelberg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and Heidelberg Materials go up and down completely randomly.
Pair Corralation between CHEMICAL INDUSTRIES and Heidelberg Materials
If you would invest 12,035 in Heidelberg Materials AG on October 20, 2024 and sell it today you would earn a total of 930.00 from holding Heidelberg Materials AG or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CHEMICAL INDUSTRIES vs. Heidelberg Materials AG
Performance |
| Timeline |
| CHEMICAL INDUSTRIES |
| Heidelberg Materials |
CHEMICAL INDUSTRIES and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMICAL INDUSTRIES and Heidelberg Materials
The main advantage of trading using opposite CHEMICAL INDUSTRIES and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES 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.| CHEMICAL INDUSTRIES vs. Scottish Mortgage Investment | CHEMICAL INDUSTRIES vs. Apollo Investment Corp | CHEMICAL INDUSTRIES vs. New Residential Investment | CHEMICAL INDUSTRIES vs. Globex Mining Enterprises |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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