Correlation Between Fomento Econmico and Grupo Financiero
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By analyzing existing cross correlation between Fomento Econmico Mexicano and Grupo Financiero Banorte, you can compare the effects of market volatilities on Fomento Econmico and Grupo Financiero 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 Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Grupo Financiero.
Diversification Opportunities for Fomento Econmico and Grupo Financiero
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fomento and Grupo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Grupo Financiero Banorte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Banorte 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Banorte has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Grupo Financiero go up and down completely randomly.
Pair Corralation between Fomento Econmico and Grupo Financiero
Assuming the 90 days trading horizon Fomento Econmico Mexicano is expected to generate 1.13 times more return on investment than Grupo Financiero. However, Fomento Econmico is 1.13 times more volatile than Grupo Financiero Banorte. It trades about 0.26 of its potential returns per unit of risk. Grupo Financiero Banorte is currently generating about 0.18 per unit of risk. If you would invest 17,100 in Fomento Econmico Mexicano on November 18, 2024 and sell it today you would earn a total of 1,422 from holding Fomento Econmico Mexicano or generate 8.32% 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. Grupo Financiero Banorte
Performance |
| Timeline |
| Fomento Econmico Mexicano |
| Grupo Financiero Banorte |
Fomento Econmico and Grupo Financiero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Econmico and Grupo Financiero
The main advantage of trading using opposite Fomento Econmico and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Grupo Financiero 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 Financiero will offset losses from the drop in Grupo Financiero'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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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