Correlation Between Holcim AG and Zwahlen Et

Can any of the company-specific risk be diversified away by investing in both Holcim AG and Zwahlen Et 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 Zwahlen Et into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holcim AG and Zwahlen et Mayr, you can compare the effects of market volatilities on Holcim AG and Zwahlen Et 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 Zwahlen Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim AG and Zwahlen Et.

Diversification Opportunities for Holcim AG and Zwahlen Et

-0.46

Correlation Coefficient

Holcim AG  Zwahlen Et

Very good diversification

The 3 months correlation between Holcim and Zwahlen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Holcim AG and Zwahlen et Mayr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zwahlen et Mayr 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 Zwahlen Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zwahlen et Mayr has no effect on the direction of Holcim AG i.e., Holcim AG and Zwahlen Et go up and down completely randomly.

Pair Corralation between Holcim AG and Zwahlen Et

Assuming the 90 days trading horizon Holcim AG is expected to generate 0.65 times more return on investment than Zwahlen Et. However, Holcim AG is 1.54 times less risky than Zwahlen Et. It trades about -0.1 of its potential returns per unit of risk. Zwahlen et Mayr is currently generating about -0.22 per unit of risk. If you would invest  8,928  in Holcim AG on September 29, 2024 and sell it today you would lose (188.00) from holding Holcim AG or give up 2.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	45.0%
Values	Daily Returns

Holcim AG  vs.  Zwahlen et Mayr

Holcim AG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Holcim AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Holcim AG is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zwahlen et Mayr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zwahlen et Mayr 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 primary indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Holcim AG and Zwahlen Et

The main advantage of trading using opposite Holcim AG and Zwahlen Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim AG position performs unexpectedly, Zwahlen Et 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 Zwahlen Et will offset losses from the drop in Zwahlen Et's long position.

The idea behind Holcim AG and Zwahlen et Mayr 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.