Correlation Between Holcim AG and Daetwyl I
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
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Holcim AG vs. Daetwyl I
Performance |
Timeline |
Holcim AG |
Daetwyl I |
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.Holcim AG vs. Swiss Re AG | Holcim AG vs. Zurich Insurance Group | Holcim AG vs. Swiss Life Holding | Holcim AG vs. Novartis AG |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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