Correlation Between Lafargeholcim and CEMATRIX
Can any of the company-specific risk be diversified away by investing in both Lafargeholcim and CEMATRIX 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 Lafargeholcim and CEMATRIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lafargeholcim Ltd ADR and CEMATRIX, you can compare the effects of market volatilities on Lafargeholcim and CEMATRIX 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 Lafargeholcim with a short position of CEMATRIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lafargeholcim and CEMATRIX.
Diversification Opportunities for Lafargeholcim and CEMATRIX
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lafargeholcim and CEMATRIX is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lafargeholcim Ltd ADR and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX and Lafargeholcim 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 Lafargeholcim Ltd ADR are associated (or correlated) with CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Lafargeholcim i.e., Lafargeholcim and CEMATRIX go up and down completely randomly.
Pair Corralation between Lafargeholcim and CEMATRIX
Assuming the 90 days horizon Lafargeholcim Ltd ADR is expected to generate 0.25 times more return on investment than CEMATRIX. However, Lafargeholcim Ltd ADR is 3.97 times less risky than CEMATRIX. It trades about 0.1 of its potential returns per unit of risk. CEMATRIX is currently generating about 0.0 per unit of risk. If you would invest 1,439 in Lafargeholcim Ltd ADR on November 5, 2024 and sell it today you would earn a total of 583.00 from holding Lafargeholcim Ltd ADR or generate 40.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Lafargeholcim Ltd ADR vs. CEMATRIX
Performance |
| Timeline |
| Lafargeholcim ADR |
| CEMATRIX |
Lafargeholcim and CEMATRIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lafargeholcim and CEMATRIX
The main advantage of trading using opposite Lafargeholcim and CEMATRIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lafargeholcim position performs unexpectedly, CEMATRIX 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 CEMATRIX will offset losses from the drop in CEMATRIX's long position.| Lafargeholcim vs. Anhui Conch Cement | Lafargeholcim vs. Buzzi Unicem SpA | Lafargeholcim vs. Wienerberger Baustoffindustrie | Lafargeholcim vs. China National Building |
| CEMATRIX vs. Tecnoglass | CEMATRIX vs. Xinyi Glass Holdings | CEMATRIX vs. Anhui Conch Cement | CEMATRIX vs. Basanite |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |