Correlation Between CMC Investment and Construction

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

By analyzing existing cross correlation between CMC Investment JSC and Construction And Investment, you can compare the effects of market volatilities on CMC Investment and Construction 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 CMC Investment with a short position of Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMC Investment and Construction.

Diversification Opportunities for CMC Investment and Construction

-0.8

Correlation Coefficient

CMC Investment  Construction

Pay attention - limited upside

The 3 months correlation between CMC and Construction is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CMC Investment JSC and Construction And Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction And Inv and CMC Investment 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 CMC Investment JSC are associated (or correlated) with Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction And Inv has no effect on the direction of CMC Investment i.e., CMC Investment and Construction go up and down completely randomly.

Pair Corralation between CMC Investment and Construction

Assuming the 90 days trading horizon CMC Investment JSC is expected to under-perform the Construction. In addition to that, CMC Investment is 2.42 times more volatile than Construction And Investment. It trades about -0.12 of its total potential returns per unit of risk. Construction And Investment is currently generating about 0.04 per unit of volatility. If you would invest  3,749,740  in Construction And Investment on September 29, 2024 and sell it today you would earn a total of  300,260  from holding Construction And Investment or generate 8.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	63.28%
Values	Daily Returns

CMC Investment JSC  vs.  Construction And Investment

CMC Investment JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Construction And Inv

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Construction And Investment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Construction may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CMC Investment and Construction

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

The idea behind CMC Investment JSC and Construction And Investment 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 CEOs Directory module to screen CEOs from public companies around the world.