Correlation Between BRF SA and Grupo Bimbo
Can any of the company-specific risk be diversified away by investing in both BRF SA and Grupo Bimbo 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 BRF SA and Grupo Bimbo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRF SA ADR and Grupo Bimbo SAB, you can compare the effects of market volatilities on BRF SA and Grupo Bimbo 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 BRF SA with a short position of Grupo Bimbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRF SA and Grupo Bimbo.
Diversification Opportunities for BRF SA and Grupo Bimbo
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BRF and Grupo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA ADR and Grupo Bimbo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Bimbo SAB and BRF SA 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 BRF SA ADR are associated (or correlated) with Grupo Bimbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Bimbo SAB has no effect on the direction of BRF SA i.e., BRF SA and Grupo Bimbo go up and down completely randomly.
Pair Corralation between BRF SA and Grupo Bimbo
Given the investment horizon of 90 days BRF SA ADR is expected to generate 1.34 times more return on investment than Grupo Bimbo. However, BRF SA is 1.34 times more volatile than Grupo Bimbo SAB. It trades about 0.09 of its potential returns per unit of risk. Grupo Bimbo SAB is currently generating about -0.02 per unit of risk. If you would invest 136.00 in BRF SA ADR on September 14, 2024 and sell it today you would earn a total of 329.00 from holding BRF SA ADR or generate 241.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.66% |
| Values | Daily Returns |
BRF SA ADR vs. Grupo Bimbo SAB
Performance |
| Timeline |
| BRF SA ADR |
| Grupo Bimbo SAB |
BRF SA and Grupo Bimbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRF SA and Grupo Bimbo
The main advantage of trading using opposite BRF SA and Grupo Bimbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA position performs unexpectedly, Grupo Bimbo 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 Bimbo will offset losses from the drop in Grupo Bimbo's long position.| BRF SA vs. Marfrig Global Foods | BRF SA vs. Pilgrims Pride Corp | BRF SA vs. John B Sanfilippo | BRF SA vs. Seneca Foods Corp |
| Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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