Correlation Between Cemex SAB and Captivision Ordinary

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

Diversification Opportunities for Cemex SAB and Captivision Ordinary

-0.23

Correlation Coefficient

Cemex SAB  Captivision Ordinary

Very good diversification

The 3 months correlation between Cemex and Captivision is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and Captivision Ordinary Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captivision Ordinary 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 Captivision Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captivision Ordinary has no effect on the direction of Cemex SAB i.e., Cemex SAB and Captivision Ordinary go up and down completely randomly.

Pair Corralation between Cemex SAB and Captivision Ordinary

Allowing for the 90-day total investment horizon Cemex SAB is expected to generate 7.55 times less return on investment than Captivision Ordinary. But when comparing it to its historical volatility, Cemex SAB de is 7.11 times less risky than Captivision Ordinary. It trades about 0.02 of its potential returns per unit of risk. Captivision Ordinary Shares is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  79.00  in Captivision Ordinary Shares on December 29, 2024 and sell it today you would lose (30.00) from holding Captivision Ordinary Shares or give up 37.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cemex SAB de  vs.  Captivision Ordinary Shares

Cemex SAB de

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cemex SAB de are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Cemex SAB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Captivision Ordinary

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Captivision Ordinary Shares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Captivision Ordinary unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cemex SAB and Captivision Ordinary

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

The idea behind Cemex SAB de and Captivision Ordinary Shares 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.