Correlation Between Xinyi Glass and CEMEX SAB

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

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

Diversification Opportunities for Xinyi Glass and CEMEX SAB

0.0

Correlation Coefficient

Xinyi Glass  CEMEX SAB

Pay attention - limited upside

The 3 months correlation between Xinyi and CEMEX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Glass Holdings and CEMEX SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMEX SAB de and Xinyi Glass 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 Xinyi Glass Holdings are associated (or correlated) with CEMEX SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMEX SAB de has no effect on the direction of Xinyi Glass i.e., Xinyi Glass and CEMEX SAB go up and down completely randomly.

Pair Corralation between Xinyi Glass and CEMEX SAB

Assuming the 90 days horizon Xinyi Glass Holdings is expected to under-perform the CEMEX SAB. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xinyi Glass Holdings is 1.46 times less risky than CEMEX SAB. The pink sheet trades about -0.02 of its potential returns per unit of risk. The CEMEX SAB de is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  44.00  in CEMEX SAB de on September 3, 2024 and sell it today you would earn a total of  8.00  from holding CEMEX SAB de or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.31%
Values	Daily Returns

Xinyi Glass Holdings  vs.  CEMEX SAB de

Xinyi Glass Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xinyi Glass Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Xinyi Glass showed solid returns over the last few months and may actually be approaching a breakup point.

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. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xinyi Glass and CEMEX SAB

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

The idea behind Xinyi Glass Holdings and CEMEX 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.