Correlation Between Best Buy and Grupo Gigante
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By analyzing existing cross correlation between Best Buy Co and Grupo Gigante S, you can compare the effects of market volatilities on Best Buy and Grupo Gigante 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 Best Buy with a short position of Grupo Gigante. Check out your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and Grupo Gigante.
Diversification Opportunities for Best Buy and Grupo Gigante
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Best and Grupo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co and Grupo Gigante S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Gigante S and Best Buy 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 Best Buy Co are associated (or correlated) with Grupo Gigante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Gigante S has no effect on the direction of Best Buy i.e., Best Buy and Grupo Gigante go up and down completely randomly.
Pair Corralation between Best Buy and Grupo Gigante
Assuming the 90 days trading horizon Best Buy Co is expected to generate 1.27 times more return on investment than Grupo Gigante. However, Best Buy is 1.27 times more volatile than Grupo Gigante S. It trades about 0.03 of its potential returns per unit of risk. Grupo Gigante S is currently generating about 0.01 per unit of risk. If you would invest 143,170 in Best Buy Co on September 14, 2024 and sell it today you would earn a total of 40,530 from holding Best Buy Co or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Best Buy Co vs. Grupo Gigante S
Performance |
| Timeline |
| Best Buy |
| Grupo Gigante S |
Best Buy and Grupo Gigante Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Best Buy and Grupo Gigante
The main advantage of trading using opposite Best Buy and Grupo Gigante positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Best Buy position performs unexpectedly, Grupo Gigante 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 Gigante will offset losses from the drop in Grupo Gigante's long position.The idea behind Best Buy Co and Grupo Gigante S 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 Gigante vs. Grupo Hotelero Santa | Grupo Gigante vs. Verizon Communications | Grupo Gigante vs. FibraHotel | Grupo Gigante vs. United States Steel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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