Correlation Between ZJK Industrial and Cemex SAB

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

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

Diversification Opportunities for ZJK Industrial and Cemex SAB

0.27

Correlation Coefficient

ZJK Industrial  Cemex SAB

Modest diversification

The 3 months correlation between ZJK and Cemex is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ZJK Industrial Co, 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 ZJK Industrial 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 ZJK Industrial Co, 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 ZJK Industrial i.e., ZJK Industrial and Cemex SAB go up and down completely randomly.

Pair Corralation between ZJK Industrial and Cemex SAB

Considering the 90-day investment horizon ZJK Industrial Co, is expected to generate 3.63 times more return on investment than Cemex SAB. However, ZJK Industrial is 3.63 times more volatile than Cemex SAB de. It trades about 0.08 of its potential returns per unit of risk. Cemex SAB de is currently generating about -0.02 per unit of risk. If you would invest  500.00  in ZJK Industrial Co, on September 2, 2024 and sell it today you would earn a total of  92.00  from holding ZJK Industrial Co, or generate 18.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.31%
Values	Daily Returns

ZJK Industrial Co,  vs.  Cemex SAB de

ZJK Industrial Co,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZJK Industrial Co, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking indicators, ZJK Industrial disclosed 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. In spite of fairly strong basic indicators, Cemex SAB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ZJK Industrial and Cemex SAB

The main advantage of trading using opposite ZJK Industrial and Cemex SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZJK Industrial 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 ZJK Industrial Co, 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.