Correlation Between Holcim AG and Daetwyl I

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Can any of the company-specific risk be diversified away by investing in both Holcim AG and Daetwyl I 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 Holcim AG and Daetwyl I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holcim AG and Daetwyl I, you can compare the effects of market volatilities on Holcim AG and Daetwyl I 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 Holcim AG with a short position of Daetwyl I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim AG and Daetwyl I.

Diversification Opportunities for Holcim AG and Daetwyl I

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Holcim and Daetwyl is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Holcim AG and Daetwyl I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daetwyl I and Holcim AG 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 Holcim AG are associated (or correlated) with Daetwyl I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daetwyl I has no effect on the direction of Holcim AG i.e., Holcim AG and Daetwyl I go up and down completely randomly.

Pair Corralation between Holcim AG and Daetwyl I

Assuming the 90 days trading horizon Holcim AG is expected to generate 0.8 times more return on investment than Daetwyl I. However, Holcim AG is 1.25 times less risky than Daetwyl I. It trades about 0.11 of its potential returns per unit of risk. Daetwyl I is currently generating about -0.25 per unit of risk. If you would invest  8,158  in Holcim AG on October 3, 2024 and sell it today you would earn a total of  578.00  from holding Holcim AG or generate 7.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Holcim AG  vs.  Daetwyl I

 Performance 
       Timeline  
Holcim AG 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Holcim AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Holcim AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Daetwyl I 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Daetwyl I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Holcim AG and Daetwyl I Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Holcim AG and Daetwyl I

The main advantage of trading using opposite Holcim AG and Daetwyl I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim AG position performs unexpectedly, Daetwyl I 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 Daetwyl I will offset losses from the drop in Daetwyl I's long position.
The idea behind Holcim AG and Daetwyl I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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