Correlation Between Confluent and CEMEX SAB
Can any of the company-specific risk be diversified away by investing in both Confluent 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 Confluent and CEMEX SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Confluent and CEMEX SAB de, you can compare the effects of market volatilities on Confluent 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 Confluent with a short position of CEMEX SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Confluent and CEMEX SAB.
Diversification Opportunities for Confluent and CEMEX SAB
Excellent diversification
The 3 months correlation between Confluent and CEMEX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Confluent 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 Confluent 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 Confluent 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 Confluent i.e., Confluent and CEMEX SAB go up and down completely randomly.
Pair Corralation between Confluent and CEMEX SAB
Given the investment horizon of 90 days Confluent is expected to generate 1.01 times more return on investment than CEMEX SAB. However, Confluent is 1.01 times more volatile than CEMEX SAB de. It trades about 0.04 of its potential returns per unit of risk. CEMEX SAB de is currently generating about 0.03 per unit of risk. If you would invest 2,111 in Confluent on August 27, 2024 and sell it today you would earn a total of 1,041 from holding Confluent or generate 49.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.33% |
| Values | Daily Returns |
Confluent vs. CEMEX SAB de
Performance |
| Timeline |
| Confluent |
| CEMEX SAB de |
Confluent and CEMEX SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Confluent and CEMEX SAB
The main advantage of trading using opposite Confluent and CEMEX SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Confluent 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.| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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