Correlation Between Fomento Econmico and Arca Continental
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By analyzing existing cross correlation between Fomento Econmico Mexicano and Arca Continental SAB, you can compare the effects of market volatilities on Fomento Econmico and Arca Continental 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 Fomento Econmico with a short position of Arca Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Arca Continental.
Diversification Opportunities for Fomento Econmico and Arca Continental
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fomento and Arca is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Arca Continental SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arca Continental SAB and Fomento Econmico 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 Fomento Econmico Mexicano are associated (or correlated) with Arca Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arca Continental SAB has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Arca Continental go up and down completely randomly.
Pair Corralation between Fomento Econmico and Arca Continental
Assuming the 90 days trading horizon Fomento Econmico Mexicano is expected to under-perform the Arca Continental. But the stock apears to be less risky and, when comparing its historical volatility, Fomento Econmico Mexicano is 1.22 times less risky than Arca Continental. The stock trades about -0.39 of its potential returns per unit of risk. The Arca Continental SAB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17,588 in Arca Continental SAB on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Arca Continental SAB or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Econmico Mexicano vs. Arca Continental SAB
Performance |
| Timeline |
| Fomento Econmico Mexicano |
| Arca Continental SAB |
Fomento Econmico and Arca Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Econmico and Arca Continental
The main advantage of trading using opposite Fomento Econmico and Arca Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Arca Continental 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 Arca Continental will offset losses from the drop in Arca Continental's long position.| Fomento Econmico vs. Grupo Financiero Banorte | Fomento Econmico vs. Alfa SAB de | Fomento Econmico vs. Grupo Mxico SAB | Fomento Econmico vs. CEMEX SAB de |
| Arca Continental vs. Alfa SAB de | Arca Continental vs. Grupo Financiero Banorte | Arca Continental vs. Fomento Econmico Mexicano | Arca Continental vs. Grupo Mxico SAB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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