Correlation Between Fluor and CMR SAB

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

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

Diversification Opportunities for Fluor and CMR SAB

0.27

Correlation Coefficient

Fluor  CMR SAB

Modest diversification

The 3 months correlation between Fluor and CMR is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and CMR SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMR SAB de and Fluor 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 Fluor are associated (or correlated) with CMR SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMR SAB de has no effect on the direction of Fluor i.e., Fluor and CMR SAB go up and down completely randomly.

Pair Corralation between Fluor and CMR SAB

If you would invest  124.00  in CMR SAB de on October 9, 2024 and sell it today you would earn a total of  13.00  from holding CMR SAB de or generate 10.48% return on investment over 90 days.

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

Fluor  vs.  CMR SAB de

Fluor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fluor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fluor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CMR SAB de

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CMR SAB de are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, CMR SAB showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluor and CMR SAB

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

The idea behind Fluor and CMR SAB de 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.