Correlation Between Heidelberg Materials and Charter Communications

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

By analyzing existing cross correlation between Heidelberg Materials AG and Charter Communications, you can compare the effects of market volatilities on Heidelberg Materials and Charter Communications 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 Heidelberg Materials with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidelberg Materials and Charter Communications.

Diversification Opportunities for Heidelberg Materials and Charter Communications

-0.36

Correlation Coefficient

Heidelberg Materials  Charter Communications

Very good diversification

The 3 months correlation between Heidelberg and Charter is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Heidelberg Materials AG and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Heidelberg Materials 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 Heidelberg Materials AG are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Heidelberg Materials i.e., Heidelberg Materials and Charter Communications go up and down completely randomly.

Pair Corralation between Heidelberg Materials and Charter Communications

Assuming the 90 days horizon Heidelberg Materials AG is expected to generate 0.62 times more return on investment than Charter Communications. However, Heidelberg Materials AG is 1.61 times less risky than Charter Communications. It trades about 0.08 of its potential returns per unit of risk. Charter Communications is currently generating about -0.18 per unit of risk. If you would invest  17,736  in Heidelberg Materials AG on May 6, 2025 and sell it today you would earn a total of  1,609  from holding Heidelberg Materials AG or generate 9.07% return on investment over 90 days.

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

Heidelberg Materials AG  vs.  Charter Communications

Heidelberg Materials

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heidelberg Materials AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Heidelberg Materials may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Charter Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Heidelberg Materials and Charter Communications

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

The idea behind Heidelberg Materials AG and Charter Communications 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 Stocks Directory module to find actively traded stocks across global markets.