Correlation Between Holcim and United States

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

By analyzing existing cross correlation between Holcim and United States Lime, you can compare the effects of market volatilities on Holcim and United States 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 with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim and United States.

Diversification Opportunities for Holcim and United States

-0.84

Correlation Coefficient

Holcim  United States

Pay attention - limited upside

The 3 months correlation between Holcim and United is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Holcim and United States Lime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Lime and Holcim 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 are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Lime has no effect on the direction of Holcim i.e., Holcim and United States go up and down completely randomly.

Pair Corralation between Holcim and United States

Assuming the 90 days horizon Holcim is expected to generate 0.88 times more return on investment than United States. However, Holcim is 1.14 times less risky than United States. It trades about 0.04 of its potential returns per unit of risk. United States Lime is currently generating about -0.21 per unit of risk. If you would invest  9,588  in Holcim on January 6, 2025 and sell it today you would earn a total of  412.00  from holding Holcim or generate 4.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Holcim  vs.  United States Lime

Holcim

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Holcim are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Holcim is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

United States Lime

Risk-Adjusted Performance

Very Weak

Over the last 90 days United States Lime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Holcim and United States

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

The idea behind Holcim and United States Lime 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..