Correlation Between CEMEX SAB and Alfa SAB

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Can any of the company-specific risk be diversified away by investing in both CEMEX SAB and Alfa 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 CEMEX SAB and Alfa SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEMEX SAB de and Alfa SAB de, you can compare the effects of market volatilities on CEMEX SAB and Alfa 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 CEMEX SAB with a short position of Alfa SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMEX SAB and Alfa SAB.

Diversification Opportunities for CEMEX SAB and Alfa SAB

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between CEMEX and Alfa is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CEMEX SAB de and Alfa SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa SAB de and CEMEX SAB 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 CEMEX SAB de are associated (or correlated) with Alfa SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa SAB de has no effect on the direction of CEMEX SAB i.e., CEMEX SAB and Alfa SAB go up and down completely randomly.

Pair Corralation between CEMEX SAB and Alfa SAB

Assuming the 90 days trading horizon CEMEX SAB de is expected to generate 1.04 times more return on investment than Alfa SAB. However, CEMEX SAB is 1.04 times more volatile than Alfa SAB de. It trades about 0.04 of its potential returns per unit of risk. Alfa SAB de is currently generating about 0.03 per unit of risk. If you would invest  844.00  in CEMEX SAB de on August 23, 2024 and sell it today you would earn a total of  268.00  from holding CEMEX SAB de or generate 31.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CEMEX SAB de  vs.  Alfa SAB de

 Performance 
       Timeline  
CEMEX SAB de 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CEMEX SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Alfa SAB de 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Alfa SAB de are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Alfa SAB displayed solid returns over the last few months and may actually be approaching a breakup point.

CEMEX SAB and Alfa SAB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CEMEX SAB and Alfa SAB

The main advantage of trading using opposite CEMEX SAB and Alfa SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEMEX SAB position performs unexpectedly, Alfa 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 Alfa SAB will offset losses from the drop in Alfa SAB's long position.
CEMEX SAB vs. Grupo Mxico SAB
CEMEX SAB vs. Alfa SAB de
CEMEX SAB vs. Grupo Financiero Banorte
CEMEX SAB vs. Fomento Econmico Mexicano
The idea behind CEMEX SAB de and Alfa SAB de 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.
Alfa SAB vs. Grupo Mxico SAB
Alfa SAB vs. Grupo Financiero Banorte
Alfa SAB vs. Fomento Econmico Mexicano
Alfa SAB vs. CEMEX SAB de
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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