Correlation Between Gentera SAB and Grupo Comercial

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Can any of the company-specific risk be diversified away by investing in both Gentera SAB and Grupo Comercial 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 Gentera SAB and Grupo Comercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentera SAB de and Grupo Comercial Chedraui, you can compare the effects of market volatilities on Gentera SAB and Grupo Comercial 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 Gentera SAB with a short position of Grupo Comercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentera SAB and Grupo Comercial.

Diversification Opportunities for Gentera SAB and Grupo Comercial

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Gentera and Grupo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gentera SAB de and Grupo Comercial Chedraui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Comercial Chedraui and Gentera SAB 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 Gentera SAB de are associated (or correlated) with Grupo Comercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Comercial Chedraui has no effect on the direction of Gentera SAB i.e., Gentera SAB and Grupo Comercial go up and down completely randomly.

Pair Corralation between Gentera SAB and Grupo Comercial

Assuming the 90 days trading horizon Gentera SAB de is expected to generate 1.64 times more return on investment than Grupo Comercial. However, Gentera SAB is 1.64 times more volatile than Grupo Comercial Chedraui. It trades about 0.19 of its potential returns per unit of risk. Grupo Comercial Chedraui is currently generating about -0.24 per unit of risk. If you would invest  2,408  in Gentera SAB de on October 20, 2024 and sell it today you would earn a total of  198.00  from holding Gentera SAB de or generate 8.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gentera SAB de  vs.  Grupo Comercial Chedraui

 Performance 
       Timeline  
Gentera SAB de 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Gentera SAB de are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gentera SAB may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Grupo Comercial Chedraui 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Comercial Chedraui has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Gentera SAB and Grupo Comercial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gentera SAB and Grupo Comercial

The main advantage of trading using opposite Gentera SAB and Grupo Comercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentera SAB position performs unexpectedly, Grupo Comercial 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 Comercial will offset losses from the drop in Grupo Comercial's long position.
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The idea behind Gentera SAB de and Grupo Comercial Chedraui 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.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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