Correlation Between Fomento Economico and STATE
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By analyzing existing cross correlation between Fomento Economico Mexicano and STATE STREET P, you can compare the effects of market volatilities on Fomento Economico and STATE 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 STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and STATE.
Diversification Opportunities for Fomento Economico and STATE
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fomento and STATE is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and STATE STREET P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STATE STREET P 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 STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STATE STREET P has no effect on the direction of Fomento Economico i.e., Fomento Economico and STATE go up and down completely randomly.
Pair Corralation between Fomento Economico and STATE
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to under-perform the STATE. In addition to that, Fomento Economico is 2.15 times more volatile than STATE STREET P. It trades about -0.22 of its total potential returns per unit of risk. STATE STREET P is currently generating about 0.08 per unit of volatility. If you would invest 8,640 in STATE STREET P on October 9, 2024 and sell it today you would earn a total of 116.00 from holding STATE STREET P or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. STATE STREET P
Performance |
| Timeline |
| Fomento Economico |
| STATE STREET P |
Fomento Economico and STATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and STATE
The main advantage of trading using opposite Fomento Economico and STATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico position performs unexpectedly, STATE 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 STATE will offset losses from the drop in STATE'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 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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