Correlation Between Cemex SAB and Gold Resource
Can any of the company-specific risk be diversified away by investing in both Cemex SAB and Gold Resource 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 Gold Resource 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 Gold Resource, you can compare the effects of market volatilities on Cemex SAB and Gold Resource 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 Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemex SAB and Gold Resource.
Diversification Opportunities for Cemex SAB and Gold Resource
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cemex and Gold is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource 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 Gold Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Resource has no effect on the direction of Cemex SAB i.e., Cemex SAB and Gold Resource go up and down completely randomly.
Pair Corralation between Cemex SAB and Gold Resource
Allowing for the 90-day total investment horizon Cemex SAB de is expected to generate 0.32 times more return on investment than Gold Resource. However, Cemex SAB de is 3.14 times less risky than Gold Resource. It trades about -0.05 of its potential returns per unit of risk. Gold Resource is currently generating about -0.05 per unit of risk. If you would invest 684.00 in Cemex SAB de on September 1, 2024 and sell it today you would lose (127.00) from holding Cemex SAB de or give up 18.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cemex SAB de vs. Gold Resource
Performance |
| Timeline |
| Cemex SAB de |
| Gold Resource |
Cemex SAB and Gold Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemex SAB and Gold Resource
The main advantage of trading using opposite Cemex SAB and Gold Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemex SAB position performs unexpectedly, Gold Resource 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 Gold Resource will offset losses from the drop in Gold Resource's long position.| Cemex SAB vs. Martin Marietta Materials | Cemex SAB vs. CRH PLC ADR | Cemex SAB vs. Eagle Materials | Cemex SAB vs. Summit Materials |
| Gold Resource vs. IAMGold | Gold Resource vs. Eldorado Gold Corp | Gold Resource vs. Coeur Mining | Gold Resource vs. Alamos Gold |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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