Correlation Between Implenia and Holcim AG

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

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

Diversification Opportunities for Implenia and Holcim AG

0.75

Correlation Coefficient

Implenia  Holcim AG

Poor diversification

The 3 months correlation between Implenia and Holcim is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Holcim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim AG and Implenia 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 Implenia AG are associated (or correlated) with Holcim AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim AG has no effect on the direction of Implenia i.e., Implenia and Holcim AG go up and down completely randomly.

Pair Corralation between Implenia and Holcim AG

Assuming the 90 days trading horizon Implenia is expected to generate 2.1 times less return on investment than Holcim AG. But when comparing it to its historical volatility, Implenia AG is 1.15 times less risky than Holcim AG. It trades about 0.15 of its potential returns per unit of risk. Holcim AG is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  4,448  in Holcim AG on April 24, 2025 and sell it today you would earn a total of  2,056  from holding Holcim AG or generate 46.22% return on investment over 90 days.

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

Implenia AG  vs.  Holcim AG

Implenia AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

Holcim AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holcim AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Holcim AG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Implenia and Holcim AG

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

The idea behind Implenia AG and Holcim AG 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.