Correlation Between Fomento Econmico and Wal Mart

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fomento Econmico and Wal Mart 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 Wal Mart 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 Wal Mart de Mxico, you can compare the effects of market volatilities on Fomento Econmico and Wal Mart 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 Wal Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Econmico and Wal Mart.

Diversification Opportunities for Fomento Econmico and Wal Mart

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fomento and Wal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Wal Mart de Mxico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wal Mart 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 Wal Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wal Mart de has no effect on the direction of Fomento Econmico i.e., Fomento Econmico and Wal Mart go up and down completely randomly.

Pair Corralation between Fomento Econmico and Wal Mart

Assuming the 90 days trading horizon Fomento Econmico Mexicano is expected to generate 0.87 times more return on investment than Wal Mart. However, Fomento Econmico Mexicano is 1.15 times less risky than Wal Mart. It trades about -0.03 of its potential returns per unit of risk. Wal Mart de Mxico is currently generating about -0.08 per unit of risk. If you would invest  19,187  in Fomento Econmico Mexicano on August 25, 2024 and sell it today you would lose (1,393) from holding Fomento Econmico Mexicano or give up 7.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fomento Econmico Mexicano  vs.  Wal Mart de Mxico

 Performance 
       Timeline  
Fomento Econmico Mexicano 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fomento Econmico Mexicano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Wal Mart de 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wal Mart de Mxico has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Fomento Econmico and Wal Mart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fomento Econmico and Wal Mart

The main advantage of trading using opposite Fomento Econmico and Wal Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Econmico position performs unexpectedly, Wal Mart 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 Wal Mart will offset losses from the drop in Wal Mart'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
The idea behind Fomento Econmico Mexicano and Wal Mart de Mxico 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.
Wal Mart vs. Alsea SAB de
Wal Mart vs. Grupo Bimbo SAB
Wal Mart vs. Fomento Econmico Mexicano
Wal Mart 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
FinTech Suite
Use AI to screen and filter profitable investment opportunities


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY