Correlation Between Cemex SAB and Endeavour Silver

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

Diversification Opportunities for Cemex SAB and Endeavour Silver

0.05

Correlation Coefficient

Cemex SAB  Endeavour Silver

Significant diversification

The 3 months correlation between Cemex and Endeavour is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp 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 Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Cemex SAB i.e., Cemex SAB and Endeavour Silver go up and down completely randomly.

Pair Corralation between Cemex SAB and Endeavour Silver

Allowing for the 90-day total investment horizon Cemex SAB de is expected to generate 0.81 times more return on investment than Endeavour Silver. However, Cemex SAB de is 1.24 times less risky than Endeavour Silver. It trades about 0.13 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.1 per unit of risk. If you would invest  590.00  in Cemex SAB de on November 28, 2024 and sell it today you would earn a total of  49.00  from holding Cemex SAB de or generate 8.31% return on investment over 90 days.

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

Cemex SAB de  vs.  Endeavour Silver Corp

Cemex SAB de

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cemex SAB de are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cemex SAB showed solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Silver Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endeavour Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cemex SAB and Endeavour Silver

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

The idea behind Cemex SAB de and Endeavour Silver Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..