Correlation Between Cemex SAB and Platinum Group

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

Diversification Opportunities for Cemex SAB and Platinum Group

-0.3

Correlation Coefficient

Cemex SAB  Platinum Group

Very good diversification

The 3 months correlation between Cemex and Platinum is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cemex SAB de and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Cemex SAB i.e., Cemex SAB and Platinum Group go up and down completely randomly.

Pair Corralation between Cemex SAB and Platinum Group

Allowing for the 90-day total investment horizon Cemex SAB de is expected to generate 0.53 times more return on investment than Platinum Group. However, Cemex SAB de is 1.87 times less risky than Platinum Group. It trades about 0.1 of its potential returns per unit of risk. Platinum Group Metals is currently generating about -0.44 per unit of risk. If you would invest  543.00  in Cemex SAB de on September 21, 2024 and sell it today you would earn a total of  22.00  from holding Cemex SAB de or generate 4.05% return on investment over 90 days.

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

Cemex SAB de  vs.  Platinum Group Metals

Cemex SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemex SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Platinum Group Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Group Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Platinum Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cemex SAB and Platinum Group

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

The idea behind Cemex SAB de and Platinum Group Metals 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 Anywhere module to track or share privately all of your investments from the convenience of any device.