Correlation Between CEMEX SAB and Cydsa SAB

Can any of the company-specific risk be diversified away by investing in both CEMEX SAB and Cydsa 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 CEMEX SAB and Cydsa SAB 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 Cydsa SAB de, you can compare the effects of market volatilities on CEMEX SAB and Cydsa 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 CEMEX SAB with a short position of Cydsa SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMEX SAB and Cydsa SAB.

Diversification Opportunities for CEMEX SAB and Cydsa SAB

0.34

Correlation Coefficient

CEMEX SAB  Cydsa SAB

Weak diversification

The 3 months correlation between CEMEX and Cydsa is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CEMEX SAB de and Cydsa SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cydsa SAB de 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 Cydsa SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cydsa SAB de has no effect on the direction of CEMEX SAB i.e., CEMEX SAB and Cydsa SAB go up and down completely randomly.

Pair Corralation between CEMEX SAB and Cydsa SAB

Assuming the 90 days trading horizon CEMEX SAB de is expected to generate 2.75 times more return on investment than Cydsa SAB. However, CEMEX SAB is 2.75 times more volatile than Cydsa SAB de. It trades about 0.06 of its potential returns per unit of risk. Cydsa SAB de is currently generating about 0.15 per unit of risk. If you would invest  1,142  in CEMEX SAB de on December 25, 2024 and sell it today you would earn a total of  74.00  from holding CEMEX SAB de or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CEMEX SAB de  vs.  Cydsa SAB de

CEMEX SAB de

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEMEX SAB de are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, CEMEX SAB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cydsa SAB de

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cydsa SAB de are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cydsa SAB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CEMEX SAB and Cydsa SAB

The main advantage of trading using opposite CEMEX SAB and Cydsa SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEMEX SAB position performs unexpectedly, Cydsa 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 Cydsa SAB will offset losses from the drop in Cydsa SAB's long position.

The idea behind CEMEX SAB de and Cydsa SAB de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.