Correlation Between Monarch Cement and CRH PLC

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

By analyzing existing cross correlation between The Monarch Cement and CRH PLC ADR, you can compare the effects of market volatilities on Monarch Cement and CRH PLC 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 Monarch Cement with a short position of CRH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monarch Cement and CRH PLC.

Diversification Opportunities for Monarch Cement and CRH PLC

0.26

Correlation Coefficient

Monarch Cement  CRH PLC

Modest diversification

The 3 months correlation between Monarch and CRH is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Monarch Cement and CRH PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRH PLC ADR and Monarch Cement 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 The Monarch Cement are associated (or correlated) with CRH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRH PLC ADR has no effect on the direction of Monarch Cement i.e., Monarch Cement and CRH PLC go up and down completely randomly.

Pair Corralation between Monarch Cement and CRH PLC

Given the investment horizon of 90 days The Monarch Cement is expected to under-perform the CRH PLC. In addition to that, Monarch Cement is 1.2 times more volatile than CRH PLC ADR. It trades about -0.02 of its total potential returns per unit of risk. CRH PLC ADR is currently generating about 0.08 per unit of volatility. If you would invest  9,146  in CRH PLC ADR on May 7, 2025 and sell it today you would earn a total of  676.00  from holding CRH PLC ADR or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

The Monarch Cement  vs.  CRH PLC ADR

Monarch Cement

Risk-Adjusted Performance

Weakest

Over the last 90 days The Monarch Cement has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Monarch Cement is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CRH PLC ADR

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in CRH PLC ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, CRH PLC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Monarch Cement and CRH PLC

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

The idea behind The Monarch Cement and CRH PLC ADR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.