Correlation Between Fomento Econmico and Sare Holding

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Can any of the company-specific risk be diversified away by investing in both Fomento Econmico and Sare Holding 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 Fomento Econmico and Sare Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Econmico Mexicano and Sare Holding SAB, you can compare the effects of market volatilities on Fomento Econmico and Sare Holding 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 Sare Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Sare Holding.

Diversification Opportunities for Fomento Econmico and Sare Holding

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fomento and Sare is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Sare Holding SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sare Holding 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 Sare Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sare Holding SAB has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Sare Holding go up and down completely randomly.

Pair Corralation between Fomento Econmico and Sare Holding

If you would invest  18,097  in Fomento Econmico Mexicano on September 1, 2024 and sell it today you would lose (212.00) from holding Fomento Econmico Mexicano or give up 1.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Fomento Econmico Mexicano  vs.  Sare Holding SAB

 Performance 
       Timeline  
Fomento Econmico Mexicano 

Risk-Adjusted Performance

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Over the last 90 days Fomento Econmico Mexicano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Sare Holding SAB 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Sare Holding SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Sare Holding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Fomento Econmico and Sare Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fomento Econmico and Sare Holding

The main advantage of trading using opposite Fomento Econmico and Sare Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Sare Holding 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 Sare Holding will offset losses from the drop in Sare Holding's long position.
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The idea behind Fomento Econmico Mexicano and Sare Holding SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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