Correlation Between Grupo Bimbo and Nemak S
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and Nemak S 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 Nemak S 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 Nemak S A, you can compare the effects of market volatilities on Grupo Bimbo and Nemak S 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 Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and Nemak S.
Diversification Opportunities for Grupo Bimbo and Nemak S
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Nemak is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A 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 Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Nemak S go up and down completely randomly.
Pair Corralation between Grupo Bimbo and Nemak S
Assuming the 90 days trading horizon Grupo Bimbo is expected to generate 3.75 times less return on investment than Nemak S. But when comparing it to its historical volatility, Grupo Bimbo SAB is 1.51 times less risky than Nemak S. It trades about 0.03 of its potential returns per unit of risk. Nemak S A is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 254.00 in Nemak S A on November 30, 2024 and sell it today you would earn a total of 16.00 from holding Nemak S A or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. Nemak S A
Performance |
| Timeline |
| Grupo Bimbo SAB |
| Nemak S A |
Grupo Bimbo and Nemak S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and Nemak S
The main advantage of trading using opposite Grupo Bimbo and Nemak S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Nemak S 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 Nemak S will offset losses from the drop in Nemak S'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 |
| Nemak S vs. Air Transport Services | Nemak S vs. GMxico Transportes SAB | Nemak S vs. DXC Technology | Nemak S vs. Salesforce, |
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 Stocks Directory module to find actively traded stocks across global markets.
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