Correlation Between CEMATRIX and Puma Exploration

Can any of the company-specific risk be diversified away by investing in both CEMATRIX and Puma Exploration 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 CEMATRIX and Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CEMATRIX and Puma Exploration, you can compare the effects of market volatilities on CEMATRIX and Puma Exploration 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 CEMATRIX with a short position of Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMATRIX and Puma Exploration.

Diversification Opportunities for CEMATRIX and Puma Exploration

0.24

Correlation Coefficient

CEMATRIX  Puma Exploration

Modest diversification

The 3 months correlation between CEMATRIX and Puma is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CEMATRIX and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and CEMATRIX 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 CEMATRIX are associated (or correlated) with Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of CEMATRIX i.e., CEMATRIX and Puma Exploration go up and down completely randomly.

Pair Corralation between CEMATRIX and Puma Exploration

Assuming the 90 days horizon CEMATRIX is expected to generate 9.84 times less return on investment than Puma Exploration. But when comparing it to its historical volatility, CEMATRIX is 1.73 times less risky than Puma Exploration. It trades about 0.01 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Puma Exploration on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Puma Exploration or generate 0.0% return on investment over 90 days.

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

CEMATRIX  vs.  Puma Exploration

CEMATRIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEMATRIX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CEMATRIX is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Puma Exploration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Exploration are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Puma Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEMATRIX and Puma Exploration

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

The idea behind CEMATRIX and Puma Exploration 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.