Correlation Between CRH PLC and Rio Tinto
Can any of the company-specific risk be diversified away by investing in both CRH PLC and Rio Tinto 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 CRH PLC and Rio Tinto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRH PLC ADR and Rio Tinto ADR, you can compare the effects of market volatilities on CRH PLC and Rio Tinto 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 CRH PLC with a short position of Rio Tinto. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRH PLC and Rio Tinto.
Diversification Opportunities for CRH PLC and Rio Tinto
Weak diversification
The 3 months correlation between CRH and Rio is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CRH PLC ADR and Rio Tinto ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio Tinto ADR and CRH PLC 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 CRH PLC ADR are associated (or correlated) with Rio Tinto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio Tinto ADR has no effect on the direction of CRH PLC i.e., CRH PLC and Rio Tinto go up and down completely randomly.
Pair Corralation between CRH PLC and Rio Tinto
Considering the 90-day investment horizon CRH PLC is expected to generate 3.55 times less return on investment than Rio Tinto. In addition to that, CRH PLC is 1.01 times more volatile than Rio Tinto ADR. It trades about 0.04 of its total potential returns per unit of risk. Rio Tinto ADR is currently generating about 0.15 per unit of volatility. If you would invest 6,288 in Rio Tinto ADR on August 28, 2025 and sell it today you would earn a total of 819.00 from holding Rio Tinto ADR or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRH PLC ADR vs. Rio Tinto ADR
Performance |
| Timeline |
| CRH PLC ADR |
| Rio Tinto ADR |
CRH PLC and Rio Tinto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRH PLC and Rio Tinto
The main advantage of trading using opposite CRH PLC and Rio Tinto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRH PLC position performs unexpectedly, Rio Tinto 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 Rio Tinto will offset losses from the drop in Rio Tinto's long position.| CRH PLC vs. Vishay Intertechnology | CRH PLC vs. Champion Gaming Group | CRH PLC vs. NETCLASS TECHNOLOGY INC | CRH PLC vs. ToysRUs ANZ Limited |
| Rio Tinto vs. Fredonia Mining | Rio Tinto vs. Paiute Oil Mining | Rio Tinto vs. Avistar Communications Corp | Rio Tinto vs. Gamma Communications plc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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