Correlation Between Grupo Mxico and ImagineAR
Can any of the company-specific risk be diversified away by investing in both Grupo Mxico and ImagineAR 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 Grupo Mxico and ImagineAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Mxico SAB and ImagineAR, you can compare the effects of market volatilities on Grupo Mxico and ImagineAR 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 Grupo Mxico with a short position of ImagineAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Mxico and ImagineAR.
Diversification Opportunities for Grupo Mxico and ImagineAR
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and ImagineAR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and ImagineAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImagineAR and Grupo Mxico 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 Grupo Mxico SAB are associated (or correlated) with ImagineAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImagineAR has no effect on the direction of Grupo Mxico i.e., Grupo Mxico and ImagineAR go up and down completely randomly.
Pair Corralation between Grupo Mxico and ImagineAR
Assuming the 90 days horizon Grupo Mxico is expected to generate 1.49 times less return on investment than ImagineAR. But when comparing it to its historical volatility, Grupo Mxico SAB is 2.8 times less risky than ImagineAR. It trades about 0.13 of its potential returns per unit of risk. ImagineAR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.15 in ImagineAR on September 23, 2024 and sell it today you would earn a total of 2.15 from holding ImagineAR or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Mxico SAB vs. ImagineAR
Performance |
| Timeline |
| Grupo Mxico SAB |
| ImagineAR |
Grupo Mxico and ImagineAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Mxico and ImagineAR
The main advantage of trading using opposite Grupo Mxico and ImagineAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Mxico position performs unexpectedly, ImagineAR 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 ImagineAR will offset losses from the drop in ImagineAR's long position.| Grupo Mxico vs. BHP Group Limited | Grupo Mxico vs. BHP Group Limited | Grupo Mxico vs. Rio Tinto Group | Grupo Mxico vs. Rio Tinto Group |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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