Correlation Between Apple and Grupo TMM
Can any of the company-specific risk be diversified away by investing in both Apple and Grupo TMM 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 Apple and Grupo TMM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Grupo TMM SAB, you can compare the effects of market volatilities on Apple and Grupo TMM 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 Apple with a short position of Grupo TMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Grupo TMM.
Diversification Opportunities for Apple and Grupo TMM
Poor diversification
The 3 months correlation between Apple and Grupo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Grupo TMM SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo TMM SAB and Apple 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 Apple Inc are associated (or correlated) with Grupo TMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo TMM SAB has no effect on the direction of Apple i.e., Apple and Grupo TMM go up and down completely randomly.
Pair Corralation between Apple and Grupo TMM
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Grupo TMM. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.17 times less risky than Grupo TMM. The stock trades about -0.05 of its potential returns per unit of risk. The Grupo TMM SAB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 515.00 in Grupo TMM SAB on August 23, 2024 and sell it today you would earn a total of 4.00 from holding Grupo TMM SAB or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Grupo TMM SAB
Performance |
| Timeline |
| Apple Inc |
| Grupo TMM SAB |
Apple and Grupo TMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Grupo TMM
The main advantage of trading using opposite Apple and Grupo TMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Grupo TMM 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 Grupo TMM will offset losses from the drop in Grupo TMM's long position.The idea behind Apple Inc and Grupo TMM SAB 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.| Grupo TMM vs. Genworth Financial | Grupo TMM vs. Verizon Communications | Grupo TMM vs. GMxico Transportes SAB | Grupo TMM vs. Lloyds Banking 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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