Correlation Between Grupo Bimbo and Desarrolladora Homex
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and Desarrolladora Homex 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 Bimbo and Desarrolladora Homex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Bimbo SAB and Desarrolladora Homex SAB, you can compare the effects of market volatilities on Grupo Bimbo and Desarrolladora Homex 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 Bimbo with a short position of Desarrolladora Homex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and Desarrolladora Homex.
Diversification Opportunities for Grupo Bimbo and Desarrolladora Homex
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grupo and Desarrolladora is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Desarrolladora Homex SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desarrolladora Homex SAB and Grupo Bimbo 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 Bimbo SAB are associated (or correlated) with Desarrolladora Homex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desarrolladora Homex SAB has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Desarrolladora Homex go up and down completely randomly.
Pair Corralation between Grupo Bimbo and Desarrolladora Homex
If you would invest 0.10 in Desarrolladora Homex SAB on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Desarrolladora Homex SAB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. Desarrolladora Homex SAB
Performance |
| Timeline |
| Grupo Bimbo SAB |
| Desarrolladora Homex SAB |
Grupo Bimbo and Desarrolladora Homex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and Desarrolladora Homex
The main advantage of trading using opposite Grupo Bimbo and Desarrolladora Homex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Desarrolladora Homex 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 Desarrolladora Homex will offset losses from the drop in Desarrolladora Homex's long position.| Grupo Bimbo vs. CEMEX SAB de | Grupo Bimbo vs. Fomento Econmico Mexicano | Grupo Bimbo vs. Alsea SAB de | Grupo Bimbo vs. Gruma SAB de |
| Desarrolladora Homex vs. Axtel SAB de | Desarrolladora Homex vs. Fomento Econmico Mexicano | Desarrolladora Homex vs. Lloyds Banking Group | Desarrolladora Homex vs. Apple Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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