Correlation Between Becle SAB and Bolsa Mexicana
Can any of the company-specific risk be diversified away by investing in both Becle SAB and Bolsa Mexicana 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 Becle SAB and Bolsa Mexicana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Becle SAB de and Bolsa Mexicana de, you can compare the effects of market volatilities on Becle SAB and Bolsa Mexicana 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 Becle SAB with a short position of Bolsa Mexicana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becle SAB and Bolsa Mexicana.
Diversification Opportunities for Becle SAB and Bolsa Mexicana
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Becle and Bolsa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Becle SAB de and Bolsa Mexicana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsa Mexicana de and Becle 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 Becle SAB de are associated (or correlated) with Bolsa Mexicana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsa Mexicana de has no effect on the direction of Becle SAB i.e., Becle SAB and Bolsa Mexicana go up and down completely randomly.
Pair Corralation between Becle SAB and Bolsa Mexicana
Assuming the 90 days trading horizon Becle SAB de is expected to under-perform the Bolsa Mexicana. But the stock apears to be less risky and, when comparing its historical volatility, Becle SAB de is 1.0 times less risky than Bolsa Mexicana. The stock trades about -0.14 of its potential returns per unit of risk. The Bolsa Mexicana de is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,030 in Bolsa Mexicana de on August 30, 2024 and sell it today you would earn a total of 130.00 from holding Bolsa Mexicana de or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Becle SAB de vs. Bolsa Mexicana de
Performance |
| Timeline |
| Becle SAB de |
| Bolsa Mexicana de |
Becle SAB and Bolsa Mexicana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becle SAB and Bolsa Mexicana
The main advantage of trading using opposite Becle SAB and Bolsa Mexicana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becle SAB position performs unexpectedly, Bolsa Mexicana 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 Bolsa Mexicana will offset losses from the drop in Bolsa Mexicana's long position.| Becle SAB vs. Wal Mart de Mxico | Becle SAB vs. Banco del Bajo | Becle SAB vs. El Puerto de | Becle SAB vs. Gruma SAB de |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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