Correlation Between Fomento Economico and WORK Medical
Can any of the company-specific risk be diversified away by investing in both Fomento Economico and WORK Medical 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 WORK Medical 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 WORK Medical Technology, you can compare the effects of market volatilities on Fomento Economico and WORK Medical 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 WORK Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and WORK Medical.
Diversification Opportunities for Fomento Economico and WORK Medical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fomento and WORK is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and WORK Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WORK Medical Technology 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 WORK Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WORK Medical Technology has no effect on the direction of Fomento Economico i.e., Fomento Economico and WORK Medical go up and down completely randomly.
Pair Corralation between Fomento Economico and WORK Medical
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to under-perform the WORK Medical. But the stock apears to be less risky and, when comparing its historical volatility, Fomento Economico Mexicano is 5.07 times less risky than WORK Medical. The stock trades about -0.08 of its potential returns per unit of risk. The WORK Medical Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 360.00 in WORK Medical Technology on September 14, 2024 and sell it today you would earn a total of 111.00 from holding WORK Medical Technology or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.33% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. WORK Medical Technology
Performance |
| Timeline |
| Fomento Economico |
| WORK Medical Technology |
Fomento Economico and WORK Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and WORK Medical
The main advantage of trading using opposite Fomento Economico and WORK Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico position performs unexpectedly, WORK Medical 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 WORK Medical will offset losses from the drop in WORK Medical'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 |
| WORK Medical vs. IPG Photonics | WORK Medical vs. GMS Inc | WORK Medical vs. Cementos Pacasmayo SAA | WORK Medical vs. Stepan Company |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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