Correlation Between Fomento Economico and XBP Europe
Can any of the company-specific risk be diversified away by investing in both Fomento Economico and XBP Europe 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 XBP Europe 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 XBP Europe Holdings, you can compare the effects of market volatilities on Fomento Economico and XBP Europe 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 XBP Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and XBP Europe.
Diversification Opportunities for Fomento Economico and XBP Europe
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fomento and XBP is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and XBP Europe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBP Europe Holdings 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 XBP Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBP Europe Holdings has no effect on the direction of Fomento Economico i.e., Fomento Economico and XBP Europe go up and down completely randomly.
Pair Corralation between Fomento Economico and XBP Europe
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to under-perform the XBP Europe. But the stock apears to be less risky and, when comparing its historical volatility, Fomento Economico Mexicano is 6.81 times less risky than XBP Europe. The stock trades about -0.16 of its potential returns per unit of risk. The XBP Europe Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 121.00 in XBP Europe Holdings on September 12, 2024 and sell it today you would lose (5.00) from holding XBP Europe Holdings or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. XBP Europe Holdings
Performance |
| Timeline |
| Fomento Economico |
| XBP Europe Holdings |
Fomento Economico and XBP Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and XBP Europe
The main advantage of trading using opposite Fomento Economico and XBP Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico position performs unexpectedly, XBP Europe 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 XBP Europe will offset losses from the drop in XBP Europe'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 |
| XBP Europe vs. Evertec | XBP Europe vs. Consensus Cloud Solutions | XBP Europe vs. Global Blue Group | XBP Europe vs. NetScout Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |