Correlation Between CEMEX SAB and Caterpillar
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By analyzing existing cross correlation between CEMEX SAB de and Caterpillar, you can compare the effects of market volatilities on CEMEX SAB and Caterpillar 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 Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMEX SAB and Caterpillar.
Diversification Opportunities for CEMEX SAB and Caterpillar
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CEMEX and Caterpillar is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CEMEX SAB de and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar 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 Caterpillar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caterpillar has no effect on the direction of CEMEX SAB i.e., CEMEX SAB and Caterpillar go up and down completely randomly.
Pair Corralation between CEMEX SAB and Caterpillar
Assuming the 90 days trading horizon CEMEX SAB is expected to generate 3.81 times less return on investment than Caterpillar. In addition to that, CEMEX SAB is 1.22 times more volatile than Caterpillar. It trades about 0.02 of its total potential returns per unit of risk. Caterpillar is currently generating about 0.1 per unit of volatility. If you would invest 487,337 in Caterpillar on November 9, 2024 and sell it today you would earn a total of 261,763 from holding Caterpillar or generate 53.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
CEMEX SAB de vs. Caterpillar
Performance |
| Timeline |
| CEMEX SAB de |
| Caterpillar |
CEMEX SAB and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEMEX SAB and Caterpillar
The main advantage of trading using opposite CEMEX SAB and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEMEX SAB position performs unexpectedly, Caterpillar 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 Caterpillar will offset losses from the drop in Caterpillar'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 |
| Caterpillar vs. Verizon Communications | Caterpillar vs. United States Steel | Caterpillar vs. The Home Depot | Caterpillar vs. Delta Air Lines |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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