Correlation Between Buzzi Unicem and CEMEX SAB
Can any of the company-specific risk be diversified away by investing in both Buzzi Unicem 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 Buzzi Unicem and CEMEX SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buzzi Unicem SpA and CEMEX SAB de, you can compare the effects of market volatilities on Buzzi Unicem 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 Buzzi Unicem with a short position of CEMEX SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buzzi Unicem and CEMEX SAB.
Diversification Opportunities for Buzzi Unicem and CEMEX SAB
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Buzzi and CEMEX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Buzzi Unicem SpA 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 Buzzi Unicem 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 Buzzi Unicem SpA 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 Buzzi Unicem i.e., Buzzi Unicem and CEMEX SAB go up and down completely randomly.
Pair Corralation between Buzzi Unicem and CEMEX SAB
Assuming the 90 days horizon Buzzi Unicem SpA is expected to generate 0.43 times more return on investment than CEMEX SAB. However, Buzzi Unicem SpA is 2.31 times less risky than CEMEX SAB. It trades about 0.08 of its potential returns per unit of risk. CEMEX SAB de is currently generating about 0.0 per unit of risk. If you would invest 1,447 in Buzzi Unicem SpA on November 5, 2024 and sell it today you would earn a total of 603.00 from holding Buzzi Unicem SpA or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.0% |
| Values | Daily Returns |
Buzzi Unicem SpA vs. CEMEX SAB de
Performance |
| Timeline |
| Buzzi Unicem SpA |
| CEMEX SAB de |
Buzzi Unicem and CEMEX SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buzzi Unicem and CEMEX SAB
The main advantage of trading using opposite Buzzi Unicem and CEMEX SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buzzi Unicem 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.| Buzzi Unicem vs. China National Building | Buzzi Unicem vs. Anhui Conch Cement | Buzzi Unicem vs. Lafargeholcim Ltd ADR | Buzzi Unicem vs. HeidelbergCement AG ADR |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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