Correlation Between CMR SAB and Promotora
Can any of the company-specific risk be diversified away by investing in both CMR SAB and Promotora 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 CMR SAB and Promotora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMR SAB de and Promotora y Operadora, you can compare the effects of market volatilities on CMR SAB and Promotora 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 CMR SAB with a short position of Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMR SAB and Promotora.
Diversification Opportunities for CMR SAB and Promotora
Good diversification
The 3 months correlation between CMR and Promotora is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CMR SAB de and Promotora y Operadora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora y Operadora and CMR SAB 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 CMR SAB de are associated (or correlated) with Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora y Operadora has no effect on the direction of CMR SAB i.e., CMR SAB and Promotora go up and down completely randomly.
Pair Corralation between CMR SAB and Promotora
Assuming the 90 days trading horizon CMR SAB de is expected to under-perform the Promotora. In addition to that, CMR SAB is 2.21 times more volatile than Promotora y Operadora. It trades about -0.01 of its total potential returns per unit of risk. Promotora y Operadora is currently generating about 0.02 per unit of volatility. If you would invest 18,043 in Promotora y Operadora on August 25, 2024 and sell it today you would earn a total of 658.00 from holding Promotora y Operadora or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMR SAB de vs. Promotora y Operadora
Performance |
| Timeline |
| CMR SAB de |
| Promotora y Operadora |
CMR SAB and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMR SAB and Promotora
The main advantage of trading using opposite CMR SAB and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMR SAB position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora's long position.| CMR SAB vs. United Airlines Holdings | CMR SAB vs. First Republic Bank | CMR SAB vs. Samsung Electronics Co | CMR SAB vs. Southwest Airlines |
| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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