Correlation Between United States and CEMATRIX
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and CEMATRIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Lime and CEMATRIX, you can compare the effects of market volatilities on United States 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 United States with a short position of CEMATRIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and CEMATRIX.
Diversification Opportunities for United States and CEMATRIX
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and CEMATRIX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United States Lime and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX and United States 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 United States Lime 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 United States i.e., United States and CEMATRIX go up and down completely randomly.
Pair Corralation between United States and CEMATRIX
Given the investment horizon of 90 days United States Lime is expected to generate 0.56 times more return on investment than CEMATRIX. However, United States Lime is 1.77 times less risky than CEMATRIX. It trades about -0.33 of its potential returns per unit of risk. CEMATRIX is currently generating about -0.23 per unit of risk. If you would invest 11,344 in United States Lime on November 28, 2024 and sell it today you would lose (1,678) from holding United States Lime or give up 14.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
United States Lime vs. CEMATRIX
Performance |
| Timeline |
| United States Lime |
| CEMATRIX |
United States and CEMATRIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and CEMATRIX
The main advantage of trading using opposite United States and CEMATRIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Smith Midland Corp | United States vs. Holcim | United States vs. Lafargeholcim Ltd ADR | United States vs. Cementos Pacasmayo SAA |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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