Correlation Between Fomento Economico and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Fomento Economico and Grupo Aeroportuario 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 Economico and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Economico Mexicano and Grupo Aeroportuario del, you can compare the effects of market volatilities on Fomento Economico and Grupo Aeroportuario 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 Economico with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Grupo Aeroportuario.
Diversification Opportunities for Fomento Economico and Grupo Aeroportuario
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fomento and Grupo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Fomento Economico 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 Economico Mexicano are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Fomento Economico i.e., Fomento Economico and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Fomento Economico and Grupo Aeroportuario
Considering the 90-day investment horizon Fomento Economico is expected to generate 2.09 times less return on investment than Grupo Aeroportuario. But when comparing it to its historical volatility, Fomento Economico Mexicano is 1.6 times less risky than Grupo Aeroportuario. It trades about 0.03 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14,367 in Grupo Aeroportuario del on August 30, 2024 and sell it today you would earn a total of 4,320 from holding Grupo Aeroportuario del or generate 30.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Fomento Economico |
| Grupo Aeroportuario del |
Fomento Economico and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and Grupo Aeroportuario
The main advantage of trading using opposite Fomento Economico and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico position performs unexpectedly, Grupo Aeroportuario 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 Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |