Correlation Between Fomento Econmico and Alfa SAB
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By analyzing existing cross correlation between Fomento Econmico Mexicano and Alfa SAB de, you can compare the effects of market volatilities on Fomento Econmico and Alfa SAB 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 Alfa SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Alfa SAB.
Diversification Opportunities for Fomento Econmico and Alfa SAB
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fomento and Alfa is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Alfa SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa SAB de 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 Alfa SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa SAB de has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Alfa SAB go up and down completely randomly.
Pair Corralation between Fomento Econmico and Alfa SAB
Assuming the 90 days trading horizon Fomento Econmico is expected to generate 2.18 times less return on investment than Alfa SAB. But when comparing it to its historical volatility, Fomento Econmico Mexicano is 1.36 times less risky than Alfa SAB. It trades about 0.02 of its potential returns per unit of risk. Alfa SAB de is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,218 in Alfa SAB de on October 25, 2024 and sell it today you would earn a total of 411.00 from holding Alfa SAB de or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Econmico Mexicano vs. Alfa SAB de
Performance |
| Timeline |
| Fomento Econmico Mexicano |
| Alfa SAB de |
Fomento Econmico and Alfa SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Econmico and Alfa SAB
The main advantage of trading using opposite Fomento Econmico and Alfa SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Alfa SAB 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 Alfa SAB will offset losses from the drop in Alfa SAB'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 |
| Alfa SAB vs. Grupo Mxico SAB | Alfa SAB vs. Grupo Financiero Banorte | Alfa SAB vs. Fomento Econmico Mexicano | Alfa SAB vs. CEMEX SAB de |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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