Correlation Between CEMEX SAB and Grupo Carso

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

Diversification Opportunities for CEMEX SAB and Grupo Carso

0.39

Correlation Coefficient

CEMEX SAB  Grupo Carso

Weak diversification

The 3 months correlation between CEMEX and Grupo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CEMEX SAB de and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of CEMEX SAB i.e., CEMEX SAB and Grupo Carso go up and down completely randomly.

Pair Corralation between CEMEX SAB and Grupo Carso

Assuming the 90 days trading horizon CEMEX SAB is expected to generate 1.07 times less return on investment than Grupo Carso. But when comparing it to its historical volatility, CEMEX SAB de is 1.12 times less risky than Grupo Carso. It trades about 0.04 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,459  in Grupo Carso SAB on September 26, 2024 and sell it today you would earn a total of  2,890  from holding Grupo Carso SAB or generate 34.16% 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.  Grupo Carso SAB

CEMEX SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEMEX SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CEMEX SAB and Grupo Carso

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

The idea behind CEMEX SAB de and Grupo Carso SAB 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.