Correlation Between Grupo Bimbo and WH Group
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and WH Group 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 WH Group 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 WH Group Limited, you can compare the effects of market volatilities on Grupo Bimbo and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and WH Group.
Diversification Opportunities for Grupo Bimbo and WH Group
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and WHGRF is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and WH Group go up and down completely randomly.
Pair Corralation between Grupo Bimbo and WH Group
Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the WH Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Bimbo SAB is 20.9 times less risky than WH Group. The pink sheet trades about -0.02 of its potential returns per unit of risk. The WH Group Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 20.00 in WH Group Limited on August 31, 2024 and sell it today you would earn a total of 59.00 from holding WH Group Limited or generate 295.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.68% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. WH Group Limited
Performance |
| Timeline |
| Grupo Bimbo SAB |
| WH Group Limited |
Grupo Bimbo and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and WH Group
The main advantage of trading using opposite Grupo Bimbo and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.| Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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