Correlation Between Cemex SAB and United States
Can any of the company-specific risk be diversified away by investing in both Cemex SAB and United States 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 United States 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 United States Lime, you can compare the effects of market volatilities on Cemex SAB and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemex SAB and United States.
Diversification Opportunities for Cemex SAB and United States
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cemex and United is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and United States Lime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Lime 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Lime has no effect on the direction of Cemex SAB i.e., Cemex SAB and United States go up and down completely randomly.
Pair Corralation between Cemex SAB and United States
Allowing for the 90-day total investment horizon Cemex SAB de is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, Cemex SAB de is 1.11 times less risky than United States. The stock trades about -0.06 of its potential returns per unit of risk. The United States Lime is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,091 in United States Lime on August 27, 2024 and sell it today you would earn a total of 9,882 from holding United States Lime or generate 194.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cemex SAB de vs. United States Lime
Performance |
| Timeline |
| Cemex SAB de |
| United States Lime |
Cemex SAB and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemex SAB and United States
The main advantage of trading using opposite Cemex SAB and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemex SAB position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Cemex SAB vs. Holcim | Cemex SAB vs. Lafargeholcim Ltd ADR | Cemex SAB vs. Eagle Materials | Cemex SAB vs. The Monarch Cement |
| United States vs. Smith Midland Corp | United States vs. Holcim | United States vs. Lafargeholcim Ltd ADR | United States vs. Cementos Pacasmayo SAA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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