Correlation Between Cemex SAB and United States

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

Diversification Opportunities for Cemex SAB and United States

-0.58

Correlation Coefficient

Cemex SAB  United States

Excellent diversification

The 3 months correlation between Cemex and United is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and United States Lime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Lime 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Lime has no effect on the direction of Cemex SAB i.e., Cemex SAB and United States go up and down completely randomly.

Pair Corralation between Cemex SAB and United States

Allowing for the 90-day total investment horizon Cemex SAB de is expected to generate 1.07 times more return on investment than United States. However, Cemex SAB is 1.07 times more volatile than United States Lime. It trades about 0.06 of its potential returns per unit of risk. United States Lime is currently generating about -0.25 per unit of risk. If you would invest  557.00  in Cemex SAB de on December 28, 2024 and sell it today you would earn a total of  45.00  from holding Cemex SAB de or generate 8.08% return on investment over 90 days.

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

Cemex SAB de  vs.  United States Lime

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. In spite of fairly unfluctuating basic indicators, Cemex SAB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

United States Lime

Risk-Adjusted Performance

Very Weak

Over the last 90 days United States Lime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cemex SAB and United States

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

The idea behind Cemex SAB de and United States Lime 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.