Correlation Between Anhui Conch and CEMEX SAB
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and CEMEX SAB 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 Anhui Conch and CEMEX SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anhui Conch Cement and CEMEX SAB de, you can compare the effects of market volatilities on Anhui Conch and CEMEX SAB 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 Anhui Conch with a short position of CEMEX SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and CEMEX SAB.
Diversification Opportunities for Anhui Conch and CEMEX SAB
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anhui and CEMEX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and CEMEX SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMEX SAB de and Anhui Conch 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 Anhui Conch Cement are associated (or correlated) with CEMEX SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMEX SAB de has no effect on the direction of Anhui Conch i.e., Anhui Conch and CEMEX SAB go up and down completely randomly.
Pair Corralation between Anhui Conch and CEMEX SAB
Assuming the 90 days horizon Anhui Conch Cement is expected to generate 1.53 times more return on investment than CEMEX SAB. However, Anhui Conch is 1.53 times more volatile than CEMEX SAB de. It trades about 0.02 of its potential returns per unit of risk. CEMEX SAB de is currently generating about -0.01 per unit of risk. If you would invest 237.00 in Anhui Conch Cement on October 26, 2024 and sell it today you would lose (7.00) from holding Anhui Conch Cement or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Conch Cement vs. CEMEX SAB de
Performance |
| Timeline |
| Anhui Conch Cement |
| CEMEX SAB de |
Anhui Conch and CEMEX SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and CEMEX SAB
The main advantage of trading using opposite Anhui Conch and CEMEX SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, CEMEX SAB 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 CEMEX SAB will offset losses from the drop in CEMEX SAB's long position.| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass Holdings |
| CEMEX SAB vs. Vulcan Materials | CEMEX SAB vs. Martin Marietta Materials | CEMEX SAB vs. Eagle Materials | CEMEX SAB vs. CRH PLC ADR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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