Correlation Between Fomento Econmico and Grupo Herdez
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By analyzing existing cross correlation between Fomento Econmico Mexicano and Grupo Herdez SAB, you can compare the effects of market volatilities on Fomento Econmico and Grupo Herdez 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 Herdez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Grupo Herdez.
Diversification Opportunities for Fomento Econmico and Grupo Herdez
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fomento and Grupo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez 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 Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Grupo Herdez go up and down completely randomly.
Pair Corralation between Fomento Econmico and Grupo Herdez
Assuming the 90 days trading horizon Fomento Econmico is expected to generate 1.42 times less return on investment than Grupo Herdez. But when comparing it to its historical volatility, Fomento Econmico Mexicano is 1.18 times less risky than Grupo Herdez. It trades about 0.04 of its potential returns per unit of risk. Grupo Herdez SAB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,862 in Grupo Herdez SAB on September 5, 2024 and sell it today you would earn a total of 1,426 from holding Grupo Herdez SAB or generate 36.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Econmico Mexicano vs. Grupo Herdez SAB
Performance |
| Timeline |
| Fomento Econmico Mexicano |
| Grupo Herdez SAB |
Fomento Econmico and Grupo Herdez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Econmico and Grupo Herdez
The main advantage of trading using opposite Fomento Econmico and Grupo Herdez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Grupo Herdez 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 Herdez will offset losses from the drop in Grupo Herdez'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 |
| Grupo Herdez vs. Alfa SAB de | Grupo Herdez vs. Fomento Econmico Mexicano | Grupo Herdez vs. Grupo Aeroportuario del | Grupo Herdez vs. Grupo Financiero Banorte |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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