Correlation Between Cemex SAB and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both Cemex SAB and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials, you can compare the effects of market volatilities on Cemex SAB and Vulcan Materials 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 Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemex SAB and Vulcan Materials.
Diversification Opportunities for Cemex SAB and Vulcan Materials
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cemex and Vulcan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials 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 Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of Cemex SAB i.e., Cemex SAB and Vulcan Materials go up and down completely randomly.
Pair Corralation between Cemex SAB and Vulcan Materials
Allowing for the 90-day total investment horizon Cemex SAB de is expected to generate 1.33 times more return on investment than Vulcan Materials. However, Cemex SAB is 1.33 times more volatile than Vulcan Materials. It trades about 0.3 of its potential returns per unit of risk. Vulcan Materials is currently generating about 0.14 per unit of risk. If you would invest 680.00 in Cemex SAB de on May 31, 2025 and sell it today you would earn a total of 224.00 from holding Cemex SAB de or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cemex SAB de vs. Vulcan Materials
Performance |
| Timeline |
| Cemex SAB de |
| Vulcan Materials |
Cemex SAB and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemex SAB and Vulcan Materials
The main advantage of trading using opposite Cemex SAB and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemex SAB position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| Cemex SAB vs. Vulcan Materials | Cemex SAB vs. Martin Marietta Materials | Cemex SAB vs. Eagle Materials | Cemex SAB vs. CRH PLC ADR |
| Vulcan Materials vs. Martin Marietta Materials | Vulcan Materials vs. TDH Holdings | Vulcan Materials vs. Senmiao Technology | Vulcan Materials vs. China SXT Pharmaceuticals |
Check out your portfolio center.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..
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